He could be right — at least about his 2021 tax bill.
Musk, who has never shied from a Twitter war, replied with a string of insults.
Why Musk will pay at least $7.6 billion in taxes this year
Although Musk hasn’t paid taxes on their value so far, he will have to pay up soon — and the tax bill will be substantial.
That’s because once he does exercise those options, the value of the shares he acquired, less the very nominal exercise price of $6.24 a share, counts as income. And his bill on those shares will be at the top federal income tax rate of 37%, plus another 3.8% net investment tax on top of that, along with some undetermined level of state income tax.
So far, Musk has exercised nearly 15 million of the 22.9 million options that were due to expire. And the value of those newly acquired shares was roughly $15.8 billion, meaning he faces a federal tax bill of $6.4 billion. He has sold 6.5 million of those newly acquired shares to pay the withholding due on the exercise of the options, according to the filings he made with the Securities and Exchange Commission about his stock trades.
He’s been exercising options and selling shares every week since early November and he will probably exercise at least another 4 million options, if not more, before the end of the year. That could raise his 2020 tax bill by nearly $2 billion more.
Last month, Musk also sold 5.4 million shares he had held in trust, most of which he has held since the 2010 initial public offering. Those shares will be taxed at a lower long-term capital gain rate of 20%, so he’ll face an additional federal tax bill of about $1.2 billion more on those sales.
So his federal tax bill to date for 2021 stands at $7.6 billion, with a chance it could rise to nearly $10 billion or more by year’s end.
Wealth tax would cost Musk – if it passes
Musk, as the richest person might face a tax bill, of $7.5 billion if that proposal were to pass, even if he didn’t trade any stock next year, given the current value of his holdings. And Tesla shares have risen more than any other in the last two years, meaning he could pay even more if it continues to gain in value. But that legislation so far has not come near to passing.
Source : Nbcnewyork