Elon Musk to Pay Over $ 11 Billion Tax This Year

Elon Musk the Tesla CEO expects to pay more than $ 11 billion tax in 2021, said in a tweet. The figure is approximately in line with a CNBC report from last week, when it estimated that Musk already paid $ 7 billion in state and federal taxes this year, and will pay another $ 5 billion by January 1. CNBC said the figures could represent "the single largest tax bill ever."

The revelation comes as Musk and other billionaires face increasing scrutiny over the amount of taxes they pay. As CNBC explains, Musk does not receive a salary or cash bonus in his role as CEO of Tesla but instead receives compensation in stocks. When he needs money, he can borrow it using his stock holdings as collateral, which does not carry the same tax obligations.

The big difference this year is that, in early November, Musk began selling billions worth of Tesla shares, which involves paying a combined tax rate of more than 53 percent according to CNBC. The decision was apparently the result of a Twitter poll conducted in November, in which users voted for Musk to sell 10 percent of his Tesla stock.

But observers have pointed out that Musk would have had to pay a big tax bill on stock options that expire next year regardless. And by choosing to exercise stock options now instead of waiting until August 2022, Musk could avoid the higher tax rates introduced under the Democrats' Build Back Better bill.

Earlier this year, ProPublica reported that Musk paid zero federal income taxes in 2018 and only paid $ 455 million in taxes in the previous four years even though his wealth grew by $ 13.9 billion. Speaking at this year's Code Conference, Musk said his taxes were zero in 2018 because he overpaid the previous year.

While Musk appears to be living up to his claim that he will pay "more taxes than any American in history" in 2021, this should come as no surprise given that, according to some reports, he is the richest person in the world. margin. Musk's net worth is currently estimated at around $ 243 billion, according to the Bloomberg Billionaires Index, nearly $ 50 billion more than Amazon founder Jeff Bezos, with a total of $ 195 billion.