Elon Musk says he will pay over $ 11 billion in taxes this year

Elon Musk is facing a hefty tax bill this year – possibly the largest in US history.

“For those who are wondering, I will pay over $ 1[ads1]1 billion in taxes this year,” the Tesla boss twitret on Monday.

It is close to a CNBC estimate that Musk should pay a total of $ 12 billion in taxes in 2021.

Musk has been selling Tesla shares worth $ 14 billion since the beginning of November, after asking his followers in a Twitter survey whether he should sell 10% of his holdings. The answer to that poll was a resounding “yes.”

But it is likely that Musk would have started selling anyway. That’s because he’s facing a massive tax bill on Tesla stock options.

Stock options Musk was granted in 2012 are set to expire in August next year. To exercise them, he must pay income tax on the gain.

Instead of taking a salary or cash bonus, Musk’s fortune comes from stock allotments and gains in Tesla’s stock price.

Although Tesla shares have fallen since Musk’s Twitter poll, they remain incredibly valuable – the stock is up 28% so far this year.

When Musk wants cash, he can simply borrow money by using the company’s shares as collateral. However, this practice has been criticized by some politicians as a tax loophole for the mega-rich.

Earlier this year, ProPublica published a survey that showed that Musk and several other billionaires did not pay any federal income tax in 2018.

Between 2014 and 2018, Musk paid $ 455 million in taxes on $ 1.52 billion in revenue, according to ProPublica, despite the fact that his fortune grew by $ 13.9 billion during this period.

According to Forbes, Musk is worth over $ 244 billion on paper, making him the richest man in the world.

Musk could have waited until next year to pay the tax bill, but that would have meant potentially being hit by higher tax rates under the Democrats’ Build Back Better Act.

The Tesla and SpaceX boss has been sparring with prominent Democrats on Twitter lately on the issue of tax evasion.

Last week, he fired back at Senator Elizabeth Warren after she questioned Time Magazine’s decision to name Musk this year, tweeting, “I want to pay more taxes than any American in history this year.”

And if Musk ends up paying the huge sum he said he wanted, there’s a chance he’s right.