“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” – this is Musk’s third tweet on the twitter polls he started on his feed.
On Saturday, Elon Musk started a poll on his Twitter feed. He asked his followers if He should sell off 10% of his stock in Tesla in order to pay more taxes. After the polls, some 57.9% of the 3.5 million voters said “YES” whiles 42.1% voted “NO”.
He tweeted that “Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock”. He followed up by saying he’ll abide by the outcome of the polls “whichever way it goes”.
Musk has been speaking against a proposal to tax unrealized gains on assets publicly traded by some of America’s wealthiest people. Presently, if a stock asset increases in value, but the owner does not sell it, he/she does not pay any taxes on the increment. This has created some sort of a loophole where the owner can gain access to credit facilities using the increased value of the asset as collateral.
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Unrealised gains
This is termed as unrealized gains. In the sense that the owner do not have the physical equivalence of the value of the asset in the form of cash or properties, but He/She is able to gain access to credit and funding using the “speculation” of the asset’s value as collateral.
Yes, “speculation” cannot be taxed. But if it can grant you access to credit facilities, then the state might want to have a look at it again. And Ron Wyden, Senator of Oregon is supporting the proposal for such assets to be taxed.
Musk early on in October expressed concerns about the proposal saying, “Eventually, they run out of other people’s money and then they come for you”.
Wyden responded to the twitter polls by saying “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”.
In September, a journalist by name Kara Swisher asked Musk for his thoughts on his ever increasing stock value. He said “I have gone on record and said I think [Tesla’s] stock price is too high, in my opinion”. He further added “What am I supposed to do? I’m not the one making it go up”.
The story so far
We are yet to hear what Musk has to say about the polls results. Meanwhile, Jesse Eisinger who is a journalist at ProPublica replied to Musk’s third twit on the conversation by saying “Thank you for confirming our story: That for the ultra wealthy income taxes are essentially voluntary”.
