“For those wondering, I will pay over $11 billion in taxes this year,” Musk tweeted on Monday in an apparent bid to put the speculations about his tax situation to rest.
The billionaire owner of Tesla and SpaceX have been selling off his Tesla stock at an ever-increasing pace, getting rid of some 12.9 million shares worth nearly $14 billion since early November.
While Musk caused a stir last month by asking his Twitter followers if he should get rid of 10% of his Tesla stock and promising to stick to whatever advice Twitter would give him, the selling spree appears to be motivated by pragmatic business concerns.
Musk has until August to snatch up a bargain that is to exercise some 22.9 million stock options that would allow him to buy Tesla shares at about 1% of their current value. In order to do that, he is required to pay income tax on the sold stock.
Musk’s own estimate of how many taxes he will pay to the US government aligns with the figures cited by the media. For instance, The Business Insider reported on Thursday that Musk is facing a tax bill “just shy of $12 billion.” The Tesla CEO is reportedly due some $8.2 billion on the stock he disposed of in 2021 alone. In addition to that, Musk is projected to pay just below $900 million in Net Investment Income Tax (NIIT) and another $2.9 billion in taxes to California, where Tesla had been headquarted until it was revealed in October that it would be moving to Texas.
The revelation also comes after Musk traded verbal blows with Senator Elizabeth Warren (D-Massachusetts), who accused him of being a “freeloader” for paying little to no taxes in the previous years. Musk fired back, branding the tax-the-rich senator a “Karen” - a term used to describe entitled white women.