The Tesla boss is known for moving the markets with his tweets.
(Photo: AP)
San Francisco Tesla boss Elon Musk asked his followers on Twitter, whether he should sell ten percent of his shares in the electric car maker. “There has been a lot of talk lately about unrealized gains as a means of tax avoidance,” Musk wrote on Saturday evening. “So I propose to sell ten percent of my Tesla shares.”
The tweet contained a poll that gave “yes” and “no” responses and was scheduled to last 24 hours. “I will stick to the results of this survey no matter how it turns out,” wrote Musk. Since he does not receive any cash wages or bonuses, selling shares is the only way for him to become taxable.
The poll received more than 700,000 votes within an hour. Initially, almost 56 percent of the participants were in favor of a sale. Musk has 62.5 million Twitter followers.
The owner of companies like SpaceX and Neuralink held approximately 170.5 million Tesla shares as of June 30. According to calculations by the Reuters news agency, taking into account Friday’s share price, selling about ten percent of it would make almost $ 21 billion. According to analysts, Musk may have to sell a large number of shares anyway to pay taxes on options that expire next year.
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Price gains on shares are taxed in the USA when the securities are sold and a profit is thus realized. This is considered to be one reason why US corporations like to buy back their own shares – and thus support the price – instead of paying out the money as dividends.
Critics complain that rich citizens can use it to build wealth without having to pay taxes. In the course of planned tax reforms by President Joe Biden, talks are about to change this.
A so-called “billionaire tax” of 23.8 percent on profits from securities, regardless of whether these were realized through a sale or not, is being discussed in the congress. It would affect approximately 700 US taxpayers with assets over $ 1 billion or with $ 100 million in annual income for three consecutive years.
The money raised in this way is intended to help finance Biden’s planned social and climate reforms. Musk has criticized the considerations.
More: Why the euphoria is dangerous for Tesla shareholders