Twitter users have decided that entrepreneur Elon Musk will sell 10% of his shares in Tesla. This was done through a poll published by him, in which he stated that he would take the step if Twitter approved, and would take into account the results of the poll, whatever they may be.
More than 3.5 million people voted, and almost 58% of them answered “yes”.
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
As a result of the decision, the billionaire would receive nearly 21 billion dollars for one-tenth of the company. As of June 30, he owned more than 170 million shares in it.
Musk had not commented on the poll 12 hours after it closed, but this morning he has a new name on Twitter – Lorde Edge, its location – Trollheim. The billionaire, who aroused the curiosity of some of the 63 million followers, is about to explain his decision.
Why should Musk sell 10% of Tesla
The reason is a dispute over the payment of taxes.
Democrats from the US Senate presented a proposal to tax the shares and other assets of billionaires to help fund President Joe Biden’s social programs. This would close a loophole in the law that allowed them to postpone the payment of capital gains taxes indefinitely. The so-called tax on unrealized profits would apply when the value of the holders’ shares increases, even if they do not sell any of their shares. Hundreds of billionaires in the United States are potentially affected.
“There’s been a lot of talk lately about how unrealized profits are a means of tax evasion, so I’m proposing to sell 10 percent of my shares in Tesla,” Elon Musk said. He clarified that he does not receive a salary or bonuses from anywhere and owns only shares, ie. there is no income to be taxed.
Musk, meanwhile, has amassed billions through a compensation package that entitles him to dispose of shares when Tesla reaches certain thresholds for earnings or share value. Some of these preferences are for the next three weeks, and he will be able to buy shares at a much lower price than the current one. Under the new legislation, this would bring him serious taxes, and he believes that the sale of 10% of Tesla could bring him funds to cover them.
The billionaire owns a 23 percent stake in Tesla, the most expensive car company in the world, whose value recently exceeded 1 trillion dollars.
The Democrats’ proposal angered Musk, who said that “they are finally running out of other people’s money and coming for you.” “I only have shares, so the only way for me personally to pay taxes is to sell shares,” he wrote at the time.
Ron Wyden, chairman of the Senate Finance Committee, responded to Musk’s behavior and proposed the reform.
“Whether the richest man in the world pays any taxes should not depend on the results of a survey on Twitter.”
Musk divided Twitter with another comment (for which he did not release a poll). After the UN World Food Program criticized him that 2% of his wealth would be enough to fight hunger, he said he would sell $ 6 billion worth of bonds and give it to the program if it could explain “how exactly $ 6 billion will deal with world hunger.”