Elon Musk says he’ll pay more than $11 billion in tax this year

Tesla CEO has slammed plans to levy more taxes against billionaires like him

Elon Musk is claiming he will pay more than $11 billion dollars in taxes this year, after being dogged by criticisms that the world’s richest man is also one of its biggest tax-dodgers.

“For those wondering, I will pay over $11 billion in taxes this year,” the Tesla CEO wrote on Twitter on Monday.

The massive tax bill, larger than the entire GDP of Bermuda, is a result of the billionaire entrepreneur selling off a larger portion of his Tesla shares, after he held a Twitter poll with his followers that resulted in a majority saying he should sell off 10 per cent of his stake in the automaker.

Mr Musk has sold $14 billion of Tesla shares since November, resulting in a likely tax bill of $11 billion or more, according to The Guardian.

The Tesla CEO doesn’t often pay such high taxes, despite his estimated wealth of around $243 billion. Instead, according to ProPublia, Mr Musk didn’t pay any federal income taxes in 2018, and had a “true tax rate” of about 3.27 per cent between 2014 and 2018, a figure reached by comparing the growth in his fortune to the amount of taxes he paid.

Mr Musk doesn’t get paid with a salary or bonuses at Tesla, allowing him to avoid income taxes until he sells his shares. Tesla stock has gone to the moon, increasing in value by more than 20,000 per cent in the last 10 years. Meanwhile, between 2014 to 2018, typical middle-class Americans saw their net worth increase by $65,000 after taxes during that period, and saw a tax bill nearly as large as that increase, around $62,000.

The Tesla CEO responded to the investigation by sending a single “?” to the publication.

Mr Musk’s fantastic wealth has become increasingly polarising on the political front.

Last week, Time magazine named the entrepreneur “Person of the Year”, setting off a storm of controversy.

Senator Elizabeth Warren, a strong proponent of reforms to increase taxes on the ultra-wealthy, responded to the honour by writing on Twitter, “Let’s change the rigged tax code so The Person of the Year will actually pay taxes and stop freeloading off everyone else.”

Mr Musk fired back, writing, “And if you opened your eyes for 2 seconds, you would realize I will pay more taxes than any American in history this year.”

The back-and-forth comes as top Democrats eye increasing taxes on the ultra-rich, including a proposal to tax the increase in value of certain stock-holdings, a key method billionaires use to grow their wealth with having to pay taxes until they decide to sell the stocks off.

Mr Musk has criticised the proposal, which would hammer him and his fellow billionaires, writing on Twitter in October, “Eventually they run out of other people’s money and then they come for you…Who is best at capital allocation — government or entrepreneurs — is indeed what it comes down to. The tricksters will conflate capital allocation with consumption.”

​​In August, a Tesla filing revealed that some 88 million of Musk’s Tesla shares, about $63 billion worth, have been pledged as collateral "to secure certain personal indebtedness”, a likely method of obtaining low-tax loans from banks unavailable to most normal people.