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23 Dec, 2021 14:10

Musk explains why his wealth is no ‘deep mystery’

Musk explains why his wealth is no ‘deep mystery’

The world’s richest man, Elon Musk, says his $245 billion fortune is fully transparent and isn’t stashed away offshore to limit his tax obligations.

“I don’t have any offshore accounts, no tax shelters,” Musk told conservative satire website the Babylon Bee, adding that his wealth “isn’t some deep mystery.”

When asked if H&R Block could do his taxes, he said: “H&R Block could easily do my taxes. I don’t need H&R Block, I could do it. It would take a few hours. My taxes are very basic.”

The businessman explained that his huge wealth and low taxes are both products of simple math. The wealth is derived from his ownership stakes in Tesla and SpaceX, which he said were “massively painful and difficult to build.”

Musk is expected to pay what is likely to be the largest single individual tax bill in US history, with federal and California income taxes estimated to exceed $11 billion. He is required to pay the tax in order to receive compensation of more than $23 billion, paid in the form of stock options that would otherwise expire in August.

As the Tesla chief executive doesn’t receive a salary or cash bonuses from his company, he can only pay his taxes by selling stock. Last month, Musk asked his Twitter followers if he should dump 10% of his Tesla holding and pay taxes on unrealized capital gains. His followers voted ‘Yes,’ and thus the selling spree began. 

“It’s important to understand, what is this wealth?” Musk said. “It’s not like I have some massive cash balances. My cash balances are very, very low, at least until I sold stock... Really the first time I sold stock in any meaningful way was this quarter.”

According to the billionaire, the one year he didn’t pay taxes was in 2018, and that’s because he had “accidentally” overpaid in 2017 and had a credit for 2018. But the criticism of his tax payments, he said, led him to sell even more stock than required by his options exercise.

Musk also revealed that his fortunes are tied up almost entirely in Tesla and SpaceX, saying “If Tesla went bankrupt, I would go bankrupt too, immediately.”

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