Elon Musk recommended selling $21 billion worth of his Tesla Stock, on Saturday. Rather of speaking with experts or lawyers, he went the Elon Musk route and created a poll on Twitter, asking his followers to vote. “I will abide by the outcome of this poll,” he declared.
After 3.5 million votes, 58 percent of voters agreed he should sell.
So, what happens after that?
According to economics scholar Ryan Radia, if Musk keeps his promise and sells the stock, he might owe $6.69 billion in long-term capital gains taxes. Is there a single example of a larger individual tax bill in history? We are unable to do so.
The stock price of Tesla will be interesting to observe this morning, although experts suggest Musk’s $21 billion tweet may not come as a surprise to current Tesla shareholders, as his plans to sell some of his Tesla shares are well known:
Musk announced in September at the Code Conference that he’d sell a “large block” of his expiring stock options in Q4.
He also declared two weeks ago that he would sell $6 billion in stock and donate it to the United Nations’ World Food Programme (WFP) if they would open their accounts and prove that that sum would eradicate world hunger.
Reading between the lines, it looks that Musk has already decided to sell Tesla stock, but he wants to have some fun on Twitter first.
The fiscal angle
Musk’s growing wealth ($338 billion as of latest count) has been the subject of a proposed “billionaire’s tax,” which would target the investment gains of the wealthiest 700 Americans. While the idea has an uphill struggle in Congress, it underscores increasing problem about avoiding tax by the top 0.01 percent of the population, whose wealth is invested in investments that aren’t taxed until they’re sold.
“Whether or not the world’s wealthiest guy pays any taxes at all shouldn’t rely on the results of a Twitter vote,” said Sen. Ron Wyden, who championed the billionaire’s tax.