As 2021 involves a detailed, many individuals are beginning to consider suppose taxes. A kind of individuals is Elon Musk. Which is humorous as a result of lots of people, particularly Senators Elizabeth Warren and Bernie Sanders, appear to suppose that Elon would not pay any taxes. Elizabeth Warren went as far as to name Elon a freeloader in a Tweet final week.
In actuality, Elon Musk is the biggest tax payer in the USA in 2021. Crazier nonetheless, he may even have simply endured the biggest particular person tax invoice in US historical past.
In case you’ve been studying Movie star Internet Price for the previous few months, you’re conscious that Elon Musk has been selling giant swaths of his Tesla shares to organize for an upcoming massive tax bill.
And on Monday afternoon Elon confirmed what most of already knew with the next Tweet:
“For these questioning, I’ll pay over $11 billion in taxes this yr.“
As of this writing he has offered $14 billion value of Tesla shares in 2021 to cowl that invoice.
Elon’s tax invoice is said to a piece of inventory choices that had been awarded in 2012. Not like his founder’s shares – which aren’t taxable till he sells them – possibility grants are handled as revenue and subsequently incur a tax debt. Taxes should be paid in money. And for somebody like Elon who’s proudly money pour, it takes large inventory gross sales to cowl large tax money owed.
The Largest Tax Bill In US History?
Is Elon’s $11 billion tax invoice the biggest in US historical past? It actually seems to be, although we may by no means know for positive because the IRS would not simply publish a listing of prime tax payments of the yr like Spotify Wrapped.
We positively know that Elon’s invoice simply crushes the roughly $2 billion in taxes Jeff Bezos owed final yr after he offered round $10 billion value of Amazon shares.
This is what we all know –
Cohen’s large invoice was associated to a legislation that Congress truly handed a decade earlier. In 2008, Congress voted to cease hedge fund managers from having the ability to delay paying taxes on offshore funds that had been earned by administration charges. Hedge fund managers had till 2018 to establish the revenue that had been earned by charges and deferred on their taxes over time.
Steve’s tax invoice on the time… which was beforehand thought of the biggest ever… got here to $3 billion. We discovered of the invoice’s measurement as a result of Cohen’s hedge fund, which solely manages his private funds, immediately went from $14 billion in belongings below administration to $11 billion.
So if that was the biggest tax invoice in historical past, Elon simply set the topped the document by $8 billion.
And here is one final large tax invoice to place this into perspective –
When Lee Kun-hee, the longtime chief of Samsung and richest particular person in South Korean historical past, died in October 2020 he was value $20 billion. At that second a clock started ticking for his heirs who inherited that fortune. Their collective invoice got here to $10.6 billion. To cowl a part of the invoice, the family had to sell off its multi-billion dollar art collection.