Tesla CEO Elon Musk, a well-known Twitter addict, thought it would be a grand idea to let the people on the platform decide whether he should pay taxes or not, so he made a poll. Musk asked the Twitterverse whether he should sell 10% of his Tesla stock, saying he was prepared to honor the results of the poll, “whichever way it goes.” Twitter voted “yes.”
The tech magnate launched the poll on Saturday in light of the recent legislative proposal to tax unrealized gains—or profits existing on paper only that don’t become real until the investment is sold—, which some have said allow billionaires to avoid paying taxes. For context, Musk explained that he only receives payment from his companies in stock and doesn’t take a cash salary or bonus. Therefore, he said, “the only way for me to pay taxes personally is to sell stock.”
Musk owns more than 17% of Tesla stock, which is valued at more than $200 billion, according to the Wall Street Journal. Selling 10% of that at current prices would amount to about $21 billion.
“Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock,” Musk wrote in the tweet with his poll, adding: “I will abide by the results of this poll, whichever way it goes.”
A total of 3.5 million people voted in Musk’s poll, of which 57.9% said he should sell and 42.1% said he shouldn’t.
Since the poll ended, however, the Twitterverse hasn’t heard much more from Musk on the subject. In a reply to a tweet asking if the poll went the way he wanted it to, Musk said he was prepared to accept either outcome.
Last month, Musk criticized a proposal by Senate Finance Chairman Ron Wyden, Democrat of Oregon, to tax unrealized gains on publicly traded assets, saying (on Twitter) that the proposal would eventually reach less wealthy taxpayers because “[e]ventually, they run out of other people’s money and then they come for you.”
For what it’s worth, Wyden’s proposal was eviscerated almost as soon as it was introduced, but it sparked an important debate, one Musk decided to wade into.
Although Musk billed this as a way for the public to decide what he does with his money, CNBC points out that it was likely the Tesla exec would have sold stock even if Twitter didn’t pull a Palpatine and tell him to do it.
This is because Musk is facing a billion-dollar tax bill on the 22.8 million shares he was awarded as stock options in 2012. In order to exercise the options, Musk has to pay income tax on what he’s gained on those shares at their current price, which comes out to a gain of roughly $28 billion. CNBC reports that due to a combined state and federal tax rate of 54.1%, the Tesla CEO stands to pay $15 billion if he exercises the options.
Musk announced in September that he would be selling some of his options in the fourth quarter of this year because they were set to expire. The Tesla CEO doesn’t usually sell stock he already has, but he has done so in the past to pay the taxes on his stock options.
Musk’s poll and its results created much to talk about on Twitter. The poll even earned a response from Wyden.
“Whether or not the world’s wealthiest man pays any taxes at all shouldn’t depend on the results of a Twitter poll. It’s time for the Billionaires Income Tax,” the senator tweeted.
To put this all in perspective, a report this past summer found that Musk paid $0 in income tax in 2018. So yeah, any amount of income tax he pays is a small step forward for humanity.
Update 11/7/2021, 10:39 p.m. ET: This post has been to clarify that Musk stands to pay $15 billion if he exercises his stock options.