How much did Elon Musk make this year? World's richest man set to pay $11 billion in taxes

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.”

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.”

Let’s change the rigged tax code so The Person of the Year will actually pay taxes and stop freeloading off everyone else. bostonglobe.com/2021/12/13/bus…

@SenWarren You remind me of when I was a kid and my friend’s angry Mom would just randomly yell at everyone for no reason

@SenWarren Please don’t call the manager on me, Senator Karen 🙏

@SenWarren And if you opened your eyes for 2 seconds, you would realize I will pay more taxes than any American in history this year

@SenWarren Don’t spend it all at once … oh wait you did already

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

Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock.Do you support this?

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?

Note, 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.

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.”

@elonmusk Elon’s non-qualified stock options would be considered as compensation income so there would be no 3.8% NIIT (net investment income tax) but Medicare taxes would apply. Thanks to @EugeneSlutsky and @vote_democracy for confirming.

"But Elon gets to keep 52.65% of the 101M shares"...Yes but those shares will be taxed at Elon's death (if not sold earlier). Current estate tax rate 40% (and likely will be higher in future).So, all in all, government will take 69M out of the 101M shares (68.4%).

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.

Edited by Saman

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