Tesla and SpaceX CEO Elon Musk has once again divided the internet over the debate of him paying his ‘fair share’ in taxes. Musk, currently the world’s richest man with an estimated net worth of around $236 billion, has been berated by politicians who accuse him of tax avoidance.
On Monday, December 20, the 50-year-old entrepreneur tweeted,
“For those wondering, I will pay over $11 billion in taxes this year.”
Tesla CEO Elon Musk v Senator Elizabeth Warren
This announcement comes after last week’s Twitter war between Senator Elizabeth Warren and Elon Musk. On December 13, Warren called out the Tesla CEO after being named ‘Person of the Year’ by Time magazine. In her tweet, she wrote,
“Let’s change the rigged tax code so The Person of the Year will actually pay taxes and stop freeloading off everyone else.”
Last month, the South-African native got into trouble when he asked his followers to vote on whether he should sell 10% of his Tesla stocks. This led to a Tesla investor attempting to sue him.
Elon Musk’s earnings in 2021
Like most CEOs in Silicon Valley, Musk does not take cash salaries or bonuses in cash. The entrepreneur’s net worth increased because of the rise in Tesla’s stock value. Elon Musk reportedly owns around 170 million shares in Tesla, out of which he plans to sell 10%.
As of mid-November, he sold 4.5 million shares out of 17.049 million shares.
According to Bloomberg’s Billionaires tracking index, Elon Musk has made a profit of $79.6 billion since last year, giving him a net worth of about $236 billion as of December 2021.
His net worth previously touched $243 billion. However, he lost $7.73 billion recently owing to a slight fall in Tesla’s stocks.
Why will Elon Musk be taxed?
As Elon mentioned in his tweet on November 7,
“I do not take a cash salary or bonus from anywhere. I only have stock, thus the only way for me to pay taxes personally is to sell stock.”
The Tesla CEO is selling his shares as the stock options he received in 2012 will expire in August 2022. Musk needs to exercise them to keep the money; however, he will have to pay income tax on them.
Elon Musk paid the tax amount of $583 million in 2016 when he exercised his stock options for around $1 billion.