The beginning of this week was far from easy for Tesla investors.
The company’s shares fell 4.92%, and closed at US$ 60.09, in the session this Monday (8), due to the newest “joke” of the company’s CEO, Elon Musk.
The billionaire, whose fortune estimated by Forbes is US$ 308.8 billion, occupying the position of richest man in the world, decided to play with assets – only this time it wasn’t the Dogecoin cryptocurrency.
Musk took a poll on his Twitter on Saturday (6), in which he questioned followers about the sale of 10% of his Tesla shares, or $21 billion in assets.
The poll, which ended on Sunday (7), had the participation of 3.5 million people, with 57.9% voting ‘yes’, and 42.1% betting on ‘no’. Musk also stated on Twitter that “he was prepared to accept any of the results”.
According to The Wall Street Journal, the CEO is Tesla’s largest shareholder, with 17% of the company, or 170.5 million shares. His participation on Friday was worth more than $200 billion; with today’s drop it was approximately US$198.1 billion.
What is behind the “joke” is much deeper than you think. Musk is already known for pronouncements on the networks that move the market – however, this card may have ulterior motives.
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?
— Lorde Edge (@elonmusk) November 6, 2021
US tax rates
The billionaire had previously said he would have to make a lot of stock options over the next three months to pay the taxes he owes the United States. “See, I don’t get paid cash or bonuses. I only have shares. So the only way to pay taxes is to sell paper,” Musk posted on Twitter.
What the world’s richest man hasn’t told followers is that he will have to shell out more than $15 billion to pay off a stock option tax levy he received for his position at the company.
US Revenue levies a 37% tax on Musk options. At the federal level, the investment tax is 3.8%, in addition to the 13.3% tax on California revenue, where the billionaire lives. All in all, taxes total $15 billion.
However, it is not in the billionaire’s métier to pay all taxes annually, which does not mean that the sale of the 10% will obligatorily settle the debts. A ProPublica investigation in June found that Musk paid no federal income tax in 2018 – and in 2017 he paid only $65,000.
Charging fees for large fortunes
Another of Musk’s concerns is the proposal put forward by the US Democratic Party that calls for taxing Americans with annual incomes in excess of $100 million or more for the next three years.
The measure is expected to impact about 700 billionaires, and Tesla’s CEO is one of the critics of the proposal. However, the population thinks otherwise.
According to a 2019 survey by The Wall Street Journal, 66% of Americans supported creating a tax on the wealth of the ultra-rich.
Elon Musk would need to pay about $50 billion in taxes over that period. The amount collected from the taxation of billionaires would reach around US$ 224 billion.
The bill was introduced in September by Democratic Senator Ron Wyder. It provided for a 23.8% charge on tradable assets, such as stocks on the stock exchange, which would be valued annually, and billionaires would be taxed on their potential earnings. Taxation would happen even if the owner never sells or makes a profit on these assets.
Since November 8, 2020, Tesla’s shares have appreciated by 59.23%.
Doubts and more doubts
Musk’s poll also raises questions about whether he is complying with a 2018 agreement reached with the SEC (United States Securities Commission) under which relevant tweets about the company must have legal approval before being published.
The SEC, questioned by Reuters, declined to comment on the matter but concluded that Musk violated the deal in 2019, prompting the agency to tighten the deal.
The billionaire was fined $20 million by the Commission for posting on the social network in 2018 that it was considering taking Tesla private for $420 a share, and that it already had guaranteed funding to do so.
The SEC also asked him to step down as president of the company.
*With information from Reuters and Ramishah Maruf of CNN Business
Reference: CNN Brasil
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
