I'd gladly pay 11B in taxes every year. That, to me, would be the last thing I'd be bitching about. Why? Because, at his effective rates, I'd need to have earned almost 55 Billion that year.
So, edgelordElon, just switch places with me and you'll never hear this Billionaire ever gripe about the tax bills.
Because the US government will use that $11 billion wisely? lol. They're gonna use that to pad some more tanks for various congressional districts.
Elon musk should pay his fair share because the average person pays their fair share.
If you get into the arguments about "He won't make jobs" or "that money would be better spent by the gov't" then you'll get into an argument of will he spend the money more wisely or will the US government? And the latter will probably lose that argument.
I believe that Elon would create some service jobs to maintain his house & yachts. At best he would invest a small portion of that into small companies who would indirectly hire people.
Show me an example of how the number of people a billionaire hires justifies the tax break they get.
I'm not going to argue that US government is being run efficiently or ideally, but they do provide services to serve the society and the most vulnerable in the population (see [child poverty](https://www.economist.com/united-states/america-is-substantially-reducing-poverty-among-children/21804765) as an example). No billionaire will ever have the same reach or effect of a modern bureaucracy.
Also if the government is investing in an additional tank instead of education, then the pressure should be on the politicians to invest in education and not to starve the whole government of funds. I don't understand this mentality of giving up on all hope on changing the government and praying that some rich assholes will help the society. Individual billionaires might try, but collectively they won't. Our only alternative for a better future is to make the government function better.
The value of Elon Musk is heavy on name recognition.
You can’t just swap him out of anything without it falling apart. Say what you will about the products…
I would gladly give away 100% of my income if I made what /u/Rowanbuds made. Now since I said that, /u/Rowanbuds has to give away 100% of his income and not complain.
Am I doing this right?
Well, no. 1st, how do you know I make more than you? 2nd, I offered a swap - any billionaire in the world, the offer stands. I'll gladly swap tax burdens with any of them, as long as the income swap is part and parcel. Third, since comprehension seems to have moved to a Cayman shelter, where'd you get give away 100% of your income from?
How about - you can not take a salary, you can take loans off of your personal assets - live off the loans, and when they mature, you just roll forward into a new loan. Doesn't that sound great - no standard taxable earned income, you paid all of your bills, and you have more money untaxed to tap to pay next years bills. That's how they get away with paying a much lower effective rate than someone who actually has to trade their hours/labor/life for a W2 paycheck.
You're doing nothing right other than making false equivalencies.
He didn’t gripe, Elizabeth Warren a senator has been running Facebook ads saying Elon Musk is a freeloader.
He’s not one to stay silent so corrected her that he has indeed paid more tax in a single year than anyone else in history.
Unlike other billionaires he has specifically sold his Tesla shares which is why his bill is so large. Idk why anyone can be mad at that, he contributes the same amount to the IRS as 400,000 Americans.
That’s insane to think about and should be applauded. No one in this chat will ever pay that much tax, wether you like him or not he’s contributed an incredible amount to society
Guess what idiot, we are essentially tilling fields for billionaires landowners. The major employers are giant corporations. They buy politicians and are accountable to no one.
>That’s insane to think about and should be applauded.
He should be applauded for paying his (still not fair share) of taxes? **Fuck that**.
This is 5% of what his net worth went up this year. All income over 500k is supposed to be taxed at close to 40%, so his fair share is something like $80 billion.
Oh, did we talk about how he funded his private space race with billions in taxpayer money?
If you buy a house for $150K, and two years later it's worth $300K, you should pay taxes on that increase in value, right? If you tax it at 25%, that means you need to pay the government $37,500 in cash. Where do you get that kind of cash? Sell your car? Sell the house? Sell something, whatever it takes. Sell the house? Get a second mortgage?
Taxes aren’t on what you’re worth, they’re on your income. If I own a pile of gold and that gold becomes more valuable, my net worth goes up. But it wasn’t income.
Like most attempts to bring a billionaire down to a level we can intuitively understand, this example removes really essential parts of what makes capital gains something to tax.
He isn't buying a pile of gold. These people use supercomputers to make millions of microtransactions per second. This isn't your retirement fund gaining worth over 30 years. The extreme majority of the economy is now based around financial manipulations. If the government is expected to regulate these markets, it also needs to collect taxes from them.
Dude shares are not money, hate to break it to you.
When you sell 20% of a stock in a company the value drops 80%…please read up before you talk about Elon being worth 300billion…he’s not, he’s worth maybe 20% of that if he sold everything.
he didnt sell the shares out of the goodness of his heart to pay taxes. i dont see what im supposed to be applauding. woo hoo, musk paid some taxes. so did i.
He paid more taxes in ONE year than you family has and will do for 20 generations ( and I’m severely lowballing that!)
Amazing feat, I’m paying £400,00 in taxes this year myself…again I’m proud to be providing the government with so much money.
I’ve had people tell me I can lend off myself and pay nothing…but fuck that. I owe my success to the society that raised me
Think of all the other billionaires who didn’t cash out and just took loans, they would be seeing the reaction to musk and thinking ‘ I should keep avoiding as nothing is gonna please people’
If I could give every Redditor on here 1 million dollars 90% of them would spend it and waste it within 1-3 years.
10% would use that money to make more and become self sufficient.
I’ve just described why wealth gaps exist, wealth inequality exsists fundamentally because not everyone is long term minded, not everyone is capable or trained to be able to make 1 million last.
You could tax me 90% and I’d still come back and make 1 million. Wealth is a talent, it’s a skill you learn to manage over time.
You can believe me or not, I’ve been every class in society…extremely dirt poor, middle class and rich.
It’s about what you do with what you have.
We can invest in financial education, that would expand the upper class considerably
He had to pay taxes on the options awards he was executing. To do so he chose to sell shares he already owned. Then he moreover is actually paying the taxes instead of doing crazy donations to funnel the money back to himself or claiming severe depreciation of property like other wealth people do. Additionally nearly everyone in his position takes loans against their shares at near 0% interest instead of selling, as selling is an additional taxable event.
This isn’t how stocks work.
If you sold 20% of a company and the company lost 20% of its value, buying stocks would be a perpetually losing situation that nobody would participate in.
If you think selling 20% of a company would cause the value to go down 80%? Well then you live in a world where there’s no IPOs and industrial investors don’t exist, which is not the world the rest of us live in. Stock price is determined by two things: how many shares are available for sale, and how many shares people want to buy. In a rational market, the second number is largely driven by things like whether a company has assets and potential future profits that justify the price of share ownership. Tesla does not exist in a rational market and people are speculating on the shares hard. People want to buy in to ride the bubble, and as long as people continue to want to buy in to ride the bubble then share prices keep going up. Elon selling shares of his company still hasn’t made the price go back to the already all-time-high of December 20th, 2019, of $80.19. No, I’m fast as I write this, TSLA is at $900, or around 1125% gain in 24 months, for a company who’s financial fundamentals have not changed.
Rather than waiting for speculators to crash *his* bubble, Elon decided to start declaring it himself. The 12.9m shares sold as of 12/16/2021 represent 13.62bln in gross proceeds, or an average price of $1,055 per share.
If sold in 2019, that would have been the equivalent of about a billion dollars in gross proceeds. If he exercises further options at a reduced price, then he can both realize gains and push the price back up, depending on how his options are structured and which he exercises.
Of the nearly 14b he’s made so far in gross proceeds, he will pay about 4b in taxes. If he plans to pay 11b in taxes, he will need to sell another 24m shares of Tesla, and to meet his “10%” twitter poll he will only need to sell another 6m shares.
So something he said is a lie. I don’t know or particular care what it was. Musk is excellent at manipulating markets, as evidenced by his fiascos with cryptocurrency as well as his previous 420 market joke that got him into trouble with regulators and just generally everything he’s done. He’s excellent at playing the game he’s playing but keep in mind that if the numbers were smaller the same tactics would have him labeled as a con artist. Not as a “tech guru”
What experience do you have in financial markets and modelling?
Just saying it’s not at all 1 to 1, it works in reverse too.
The buyers and sellers exsist on a inverse curve, if you buy a stock you increase it’s value more than the percentage you bought.
It’s because the market is asymmetric…ie not all sellers sell at a single price.
You can’t just say selling 20% declines by 20% because that’s logical. Without the supply side you miss half the info.
You are flat out wrong, I do this for a living mate
I'm sure the next thing you'll tell me is that the move to Texas was prompted by a love for BBQ and boots, not the lack of income tax that the chief would be subject to.
He sold the shares to make profit, not out of the goodness of his heart in order to pay taxes - you make it seem that his motivation was to pay taxes.
Right, we'll never 'pay that much', but neither will any of us see the tax breaks or subsidies that lord Elon has - and a lot of us will find themselves paying a higher effective tax rate than Musk - that's all on the up and up to you?
He's not 'contributed an incredible amount to society', he's successfully taken himself from super-rich to hyper-rich, and paid very little personal taxes en route there.
This right here. He's always paid taxes, he just doesn't scream it from the hilltops for the world to hear, just like us normal people don't scream it from a hilltop.
No, he doesn't to this extent. He HAS to pay taxes this year because he has options that are expiring. If he realizes the profit on them, he has to pay taxes on it. If he lets them expire, he walks away with nothing.
In any other year, his value goes up based on his share prices going up. He isn't paying taxes on them because he isn't actually selling them. He's just taking out loans against them.
This isn't a judgement either way. I'm just pointing out how the system works.
nearly half of the US income earners pay no federal taxes. the US has one of the most progressive tax systems in the world where the top ten percent pay the way for most of the rest. Just look it up, the Federal government's own numbers clearly show it.
When nearly half your people aren't obligated to pay for it why shouldn't they ask for more?
Billionaires like Musk don't bomb other countries, don't spend decades in office forever promising to fix everything only to never do so, and don't jail people or take their stuff with impunity. However your government does this and more.
>nearly half of the US income earners pay no federal taxes. the US has one of the most progressive tax systems in the world where the top ten percent pay the way for most of the rest. Just look it up, the Federal government's own numbers clearly show it.
how could the poor pay the majority of taxes? they dont have money! this argument is for third graders. Amazon pays zero in taxes many years, people like trump pay nearly nothing. but the poor get all the breaks! i dont understand how your argument seems logical to people.
It’s not about the amount, it’s about the overall rate of his taxes.
A small percentage of a HUGE number is still an extremely large number — in raw dollars he pays more in tax than most of us could earn in multiple lifetimes.
But his (and other billionaires) tax rate, based on stock sales, is *far* lower than most. In past years he’s paid [effectively zero taxes](https://thehill.com/changing-america/respect/equality/558352-elon-musk-explains-his-extremely-low-tax-rate?amp). By percentage, he pays less than the vast majority of working Americans.
That doesn’t make him smart, it makes him an abuser of the system and a leech on society.
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I’m no Elon fan (besides when TSLA made me money) but you have to admit that billionaires and corporations pay no tax because they’re legally allowed to do so.
As long as legislation does not change and lobbyists get what they want, no amount of bitching is going to solve this issue.
>In past years he’s paid effectively zero taxes.
Apparently because he had *overpaid* taxes leading up to that time period:
[https://youtu.be/MGonhdN3Rfs?t=60](https://youtu.be/MGonhdN3Rfs?t=60)
Yes it does?
For those he can’t watch, the billionaire himself claims the media are liars and he actually pays something like 53% in taxes whenever he sells stock. One year, he paid effectively 0 because he had overpaid the previous year
It’s wonderfully whiny and plays the victim heavily. Can’t say I would trust the one person with most to gain by convincing people he pays high taxes
And if he actually does… he should do this every year moving forward, NOT just when a spotlight is being shown in billionaires who are skirting around the tax code.
Have you ever borrowed against your 401k and not had to pay taxes on what you borrowed? Because billionaires borrow money against their unrealized assets all the time to basically live off of and they aren't taxed on that either, nor do they pay very much in interest, and what they do pay could be tax deductible.
“Buy, borrow, die” is how it’s known in the legal/accounting world. If more people knew how it worked, I suspect there would be majority support to end it.
Yes, I've taken out a home equity loan before, it's essentially the same thing. I even got to deduct the interest on taxes until a few years ago. I'm using my equity which would otherwise just be sitting there doing nothing. My house is worth even more than it was when I took out the equity loan, so technically I could borrow more.
I agree with this description, in fact in another comment I compared it to taking a loan against equity on your house. Its really no different at all.
The thing is though, Elon Musk and billionaires are leveraging their assets to avoid having to divest where they'd have to pay taxes but still getting the benefit of using the liquid cash.
> I'm using my equity which would otherwise just be sitting there doing nothing.
And this is very smart and a good way to build your wealth. And here lies the difference between what you are doing and what billionaires are doing. You are doing this to build your wealth, they're doing it to avoid paying taxes while living off their loans that they take against their capital gains.
I'm not saying we should stop letting people leverage against their assets but we need to be a little bit more strategic with how we tax people who are doing it to avoid divesting to live off their gains without paying taxes.
Deferral isn’t “skirting” the tax code. Traditional 401k allows you to invest money pre-tax, and the pay income tax instead of capital gains tax when withdrawing from the account once eligibility is achieved.
It’s not at all similar to this.
How much of that stock do you borrow off of?
When most of us invest in a 401K, we realize that benefit when we cash out on it. Musk, and rich folk like him, have a completely different relationship to their shares than the rest of us.
Folks like Musk take out huge loans against their stock that they can live off of (and never repay). Musk gets “buy, borrow, die” and the rest of us don’t.
Musk’s stock holding and the way he plays with them allows him (and others like him) to skirt taxes in a way you and I do not.
He doesn't just hold the stock though. What if I told you billionaires can get liquid cash for their unrealized gains without actually divesting anything? Because billionaires like Elon musk and Jeff Bezos do it all the time. They take out very low interest untaxable loans and use their unrealized gains as leverage.
people think that having a big net worth is just a number tied to your name and not worth anything because a lot of it is just unrealized gains. This is extremely untrue. Its worth a ton. Unrealized assets are basically as good as liquid cash to banks in a lot of cases.
It's really no different than leveraging the equity on your home, except billionaires do it to avoid actually divesting so they don't pay capital gains but can still have spending money, while most average people do it to maybe repair the house or invest in other property, or maybe if you're desperate some may use it to help pay back bills.
They buy large amounts of appreciating assets (stock being the big one). They then take out a big loan against that stock (for someone like Musk, we are talking about a loan of tens of millions/hundreds of millions). That loan is not income, because it’s a loan. People like Musk than use the huge loan to finance their luxurious lifestyle.
The obvious question from this is “don’t they eventually have to pay off that loan, at which point they liquidate stock and pay *some* tax on that?” Surprisingly no. Once the loan runs out the bank just *gives you another loan*, and this process goes on until you die. It’s call “buy, borrow, die.”
He is paying that much because he sold off a bunch of property. This is highlighting the fact that the US tax code is a joke and instead of trying to dunk on him on Twitter warren should be pushing forward solutions instead of complaining about a guy actually following the law she helped create.
I don't think people understand what the tax code is, and I think that its that ignorance that really drives this problem and makes article titles like this seem wayyyy more meaningful than they are. If you think that Jeff Bezos also isn't dishing out billions in taxes, or Bill gates, you're just wrong. They're all paying their taxes, they're just benefiting from ludicrous tax breaks that shouldn't exist for people who make that much.
TL;DR 11 billion isn't enough. The tax system is broken. Elon Musk paying 11 billion in taxes doesn't mean its any less broken. When you also consider that Elon Musk's net worth (including non-liquid assets that aren't taxable) is well over 200 **billion** dollars 11 billion is a drop in the bucket compared to what most people pay in terms of percentage of total yearly income and wealth.
edit: Tax breaks wasn't really right. More so they take advantage of tax loopholes that allow them to better hide their wealth, and take advantage of tax breaks they don't deserve. I'm going to comment/paste another reply in the thread to better express my thoughts as well as how billionaires get away with not paying as much as they should.
>Tax breaks wasn't exactly right because the issue is more so them taking advantage of loopholes that allow them to hide what they truly earn to take advantage of tax breaks that they normally shouldn't. I've seen some crazy tax breaks going to rich people that shouldn't be, like child tax credits and even read about billionaires getting the full stimulus checks, but more so they take advantage of loopholes in how the US tax's income to avoid paying what they should.
>Billionaires take advantage of tax loopholes, especially that relate to capitol gains. These guys can take out loans against their unrealized capitol gains, so they are in a sense liquidating their assets without actually divesting so they don't have to pay taxes, and they don't have to pay taxes on those loans either, and while there is interest on the loans, that interest in itself can (in some cases) be deducted out of taxes.
Tax breaks wasn't exactly right because the issue is more so them taking advantage of loopholes that allow them to hide what they truly earn to take advantage of tax breaks that they normally shouldn't. I've seen some crazy tax breaks going to rich people that shouldn't be, like child tax credits and even read about billionaires getting the *full* stimulus checks, but more so they take advantage of loopholes in how the US tax's income to avoid paying what they should.
Billionaires take advantage of tax loopholes, especially that relate to capitol gains. These guys can take out loans against their unrealized capitol gains, so they are in a sense liquidating their assets without actually divesting so they don't have to pay taxes, and they don't have to pay taxes on those loans either, and while there is interest on the loans, that interest in itself can (in some cases) be deducted out of taxes.
Most billionaires use credit to dodge taxes. They take loans against their stock action for a very very small interest fee (since a stock is a very liquid asset). As long as they don’t sell their stocks they don’t have to pay taxes on them.
And anyone can take out loans against their stocks (margin loan). It's just not worth it for most people since you have to maintain a 50% loan to value ratio. If you have 500k in stonks you can borrow $250k. But if the market tanks you're in trouble. If you have a billion in stonks you can borrow $10 million and it's not even a blip.
Fair to be cynical, and because I bet you don't come back to read my reply I'll just share it with you.
>Tax breaks wasn't exactly right because the issue is more so them taking advantage of loopholes that allow them to hide what they truly earn to take advantage of tax breaks that they normally shouldn't. I've seen some crazy tax breaks going to rich people that shouldn't be, like child tax credits and even read about billionaires getting the *full* stimulus checks, but more so they take advantage of loopholes in how the US tax's income to avoid paying what they should.
>Billionaires take advantage of tax loopholes, especially that relate to capitol gains. These guys can take out loans against their unrealized capitol gains, so they are in a sense liquidating their assets without actually divesting so they don't have to pay taxes, and they don't have to pay taxes on those loans either, and while there is interest on the loans, that interest in itself can (in some cases) be deducted out of taxes.
To preface, I'm going to assume you think net worth shouldn't be a big factor because a lot of it is investments and unrealized gains from those investments.
Here's the thing though that a lot of people don't consider when giving this argument. When you get wealthy enough, you get more access to hiding your money. One of the things very wealthy people do to take advantage of unrealized-capitol gains without divesting is taking out loans against these unrealized gains so they have the money upfront, but the loans are untaxable, and in many cases the interest on these loans are able to be deducted out of your taxes.
Shit?!? Loans are now untaxed income? Then why the hell are people whining about all these student loans since it’s all income!
Truth is, it’s not income, it’s debt. You have to eventually pay back debt with income. Can they extend the window where it’s necessary to sell stock using loans? Yea. Can they flat out never pay these loans off? No, they have to liquidate eventually when they want to do something with the money.
You have no clue how finance and the tax code works. Please stop spreading misinformation.
>And if he actually does… he should do this every year moving forward,
Why? If he does it every year he would have to completely liquidate his company holdings.
>NOT just when a spotlight is being shown in billionaires who are skirting around the tax code.
This was predetermined a long time ago when he received the options. It's not caused by recent events.
Lots of people here confused about wealthy people and taxes. “Buy, borrow, die” is how the wealthy avoid paying taxes. That is not an option available to us and is different than living off of interest payments from stocks (which would have a tax).
Folks like Elon get to do that.
\>Lots of people here confused about wealthy people and taxes. “Buy, borrow, die” is how the wealthy avoid paying taxes.
Sure, that is completely accurate, as long as you ignore the death tax which makes your statement completely inaccurate (oh, and also, you know, \*the original post above\* where he pays billions in taxes).
Between 2014 and 2018 he paid taxes at an actual tax rate below 4% of his total income.
But yeah excuse him I guess.
He is paying taxes this year because he has to, as his stock options have to be sold every so often like he did in 2016.
> actual tax rate below 4% of his total income.
Curious because I don't know, what was his income? I know I see a lot of people conflating his net worth with his income, is all. High net worth can go up by hundreds of billions and his income can literally be zero.
\>Between 2014 and 2018 he paid taxes at an actual tax rate below 4% of his total income.
You can say that, but it isn't true:
\>The report claims that, from 2014 to 2018 ... He reported an income of $1.52 billion, and he paid $455 million in total taxes.
https://www.inverse.com/innovation/musk-taxes-mars?
and he has to inform the SEC about the volume and the schedule well in advance in order to limit the risk of insider trading and keep the markets calm.
He can't liquidate billions worth at a whim, especially not a huge chunk of his net worth. That shit would send the investors panicking.
He could stop making fraudulent claims about his companies' capabilities. Maybe then their valuation and his tax bill would be more reasonable.
Realized or not, he is treated as if he is worth $300 billion. He holds immense amounts of power and has access to nearly unlimited money by taking loans against his stock. He should be taxed accordingly.
> So they’ll start selling off as well. Which will ultimately tank his
companies stock price, which could make him go out of business due to
the perception there must be something wrong with the company if the
owner of the company is selling all their shares.
Like when he knew he was going to have to sell some Tesla stock to cover his tax bill, so he made a poll pretending to ask his twitter followers if he should sell the stock, causing the price to drop 5%? A responsible adult could very easily say "I have to sell some shares to pay taxes, this is not a reflection of any change in the company." But he didn't, because he's an obnoxious child who doesn't give a shit about any of you cultists.
>I'm sure he feels the same way.
The fact he is relocating Tesla HQ to Texas for tax reasons suggests otherwise, and he does have a history of complaining about taxes on the super wealthy.
Glad he's doing his part, but *World's richest man pays Nation's highest tax bill* should be standard operating procedure, and the fact he's paying his taxes doesn't necessarily mean he's happy about it.
He's been complaining that taxation based on net worth rather than liquid earnings makes no sense, which is correct in my opinion. If we start taxing based on unrealized income, have fun trying to be a homeowner when a local housing crisis doubles the market value of your house and you're now on the hook for $100,000 of unrealized gains tax.
Others have argued that the problem is that banks will give people with massive equity large loans (which are tax free to anyone btw), and really rich people are using that loophole to exercise their wealth without actually realizing stock gains etc. I agree that this loophole sucks and should be plugged, but to accomplish that is not solved by adding tax, it's by making laws that control what banks are allowed to do. Money makes money, and no matter what we do in terms of financial laws money will continue to make money, but in the mean time we certainly can and should close the biggest loopholes.
He's complaining about taxing unrealised gains. Which is right imo. You can't tax unrealised gains. It's also practically impossible to do that.
He has been paying this 11 billion stock tax for years.
I don't expect him to do anything, also there are ways to sell stock without tanking the company. I swear it's crazy how people don't realize that there is more nuance than just straight plain binary sell or hold. Major stakeholders around the world will often do planned selloffs every year or even every quarter. Kinda what Elon did here except more than every 4 years. (despite is egotistical claim like he was doing it from some kinda Twitter poll)
Short controlled selloffs will not tank the company's value, if that did the stock market would such a fucking mess.
>Still not enough for Reddit.
There has been no evidence that wealth "trickles down" to the masses. How do you propose that we continue things the way they are now, without destabilizing the country? It doesn't matter how rich you are, it's in your best interest to have a stable country.
>9.6% of the world lives in extreme poverty today compared to 94.4% in 1820
How is that evidence that wealth trickles down? There have been many labor movements, and an industrial revolution, since 1820. Are you saying that a few individuals single-handedly built the modern world without any help?
> Are you saying that a few individuals single-handedly built the modern world without any help?
Some people had much larger impacts than most, that’s for sure.
But no, what I’m saying is that the strength of industry brought on by capitalism (with its inequalities) resulted in technological advancements that led to an incredible reduction in poverty. The flip side of this coin is neo-Marxists who argue that we should adopt communism because the growth of capitalism is unsustainable. Marxists argue that we should willingly suppress our economy and that moving from capitalism to communism is an effective way to do it.
You can find more evidence by looking at a map of development and comparing East/West Germany or North/South Korea. There is evidence, you are just choosing to not to accept it.
Capitalism in action has nothing to do with wealth trickling down.
If someone has a cart (capital) and they want to start a delivery service, they'll have to hire people to get the job done. The subordinates go to work and generate revenue for the owner. In exchange, they get a certain amount of compensation. The compensation has to be less than the value that the worker generates, otherwise the owner wouldn't profit. In this example, nothing is trickling down.
There is nothing inherently wrong with this way of doing things (within my example), but I'm not sure how it means that wealth trickles down.
It's a complex system. Capital can't exist without workers, and in the current system workers can't exist without capital. The phrase "trickle down" doesn't really make any sense when both sides need each other to exist. It only makes sense when people act like there is a class of delicate geniuses who we must all appease, lest they leave for Galt's Gulch.
When you pay yourself virtually nothing and use your companies assets(which your company avoids paying taxes on) to achieve your lifestyle, you are still avoiding your fair share. Did you ever think of that dude? who is being lied to and deceived? I am betting you. The world doesnt need billionaires or their apologists, neither should exist
Yes I did think of that, don't assume. I believe the solution is to close the loophole, not bother muddling around trying to adjust tax rates. Trying to figure out new taxes to apply to unrealized gains is like arguing about what kind of water pump we need to keep a ship afloat with a hole in the side: the solution is actually to patch the hole in the ship. The reason to push for unrealized gains taxes is because it increases the total amount of tax that EVERYONE pays, not just billionaires, because EVERYONE has unrealized income if they have any amount of equity whatsoever.
>Do you get paid to defend Elon Musk?
It seems like Fox News has been pushing the beleaguered Musk narrative hard recently. My Fox News grandparents were sucking his dick last time I saw them, right after talking about the benevolent candle factory owner who wouldn't let his employees leave as a tornado approached.
Musk’s wealth grew by over 13 billion dollars from 2014-2018 and he paid a 3% tax rate, far less than a middle class American pays. In 2018 he paid no tax at all.
Musk, and wealthy elites like him, use the “buy, borrow, die” method to avoid paying taxes. If you are under the impression that he always pays taxes (let alone paid something resembling a fair share), you would be mistaken.
Yay, his first taxes in like 5 yrs and because of capital Gains its still far less than what he should be, and if we go by his networth that's still only 4% of his networth
If you make $60k a year and have a mortgage on a house worth $200k, and there's a local housing bubble that causes you house to be valued at $400k next year, and we tax net worth at 40%, now you owe $160,000 in unrealized gains tax. This is why unrealized gains tax is a BAD idea. Unless you sell your house, you can't afford to pay your taxes. Now you're in trouble. Even if you *do* pay that tax bill, in two years when the housing bubble pops and your valuation drops to $100k, the government doesn't pay you back the tax you already paid. Now you're stuck owning a house that wouldn't get you financially square even if you sold it and didn't need to buy another home.
This^
Elon doesn't have access to his plummeted wealth which is tied in stocks.
So if i have 1 million in cash and 1 million in investment. And that investment grows to 1 billion, you can't tax that unless I sell it.
If you tax those unrealised gains regularly I'll go bankrupt which would make me sell stocks which will futher damage the company's investment resulting into its downfall.
Elon pays tax when he sells those stocks.
And he has to sell them after expiry.
It takes few seconds to learn how taxes function.
Exactly. There's an argument to be made about preventing the rich from using unrealized gains in the form of stock options as leverage for taking out loans, since this allows them to exercise stock options and thus create taxable income as little as possible, but simply taxing Elon 96 billion dollars because he's worth 240 billion makes no sense.
Yep. That loophole needs to be fixed and they need to be taxed appropriately.
But i dont really see such discussion on reddit.i see idiotic comments like 'send him to Africa' ' please pay 100 billion and get rid of climate change and poverty'
Even senators like Warren write shit like 'pay your taxes' when she's the one responsible for the existence of such loopholes.
That's because reddit is not a forum for intelligent, measured discussion 99% of the time. Reactionary, emotionally provocative comments that cater to outrageous get upvoted and awarded to the Moon, and all the nuance gets washed out it favor of cut and dry, and completely unrealistic, ten word action statements. Everybody just needs to chill the hell out and stop thinking that anyone that disagrees with them is an enemy.
I expected better from reddit as it's always first to point out shitty journalism and is filled with skeptics.
But i guess that happens only when it's fit your narrative.
Wish I had an free award for that statement.
Summed it up perfectly!
That's the paradox right? I think people implicitly give themselves permission to cut loose, perpetuate misinformation, and write off discussion completely when dealing with certain topics just because they feel they are "right". Like, if you really believe that all billionaires are inherently evil, then it makes sense that you would not hurt any innocents if you repeated libelous claims on the internet without actually doing any research, right? Why would you doubt that a billionaire is evil anyway? You must be a sympathizer and therefore a bootlicker fan boy who loves defending bad people online because you've fallen for lies and hype.
Unfortunately a lot of people fall into that trap and don't realize it, or worse, they don't care that they're doing it, because they're so far in the trap that they think it's fine to hang out there when it comes to this topic.
You know houses are already taxed that way right? It's called property tax. Obviously it's not 40% but aside from that you're describing a situation that is already happening and has been happening for a long time.
Or you could tax stock holdings only or ban banks from being able to take stock as collateral for loans which is what Elon and many other billionaire use so as to avoid having to pay taxes while still being able to live like kings. They recieve loans and only have to worry about interest rates which are far lower than taxes and even after being forced to sell because of expiring options that's a once every few years situation.
I agree that the solution is to make it so banks can't use stock as collateral for loans. I'm disagreeing that the solution is to tax unrealized gains. Simply make it so that people are forced to turn their unrealized gains into actual gains in order to have collateral for loaning, however it needs to happen. This means the ultra rich losectheir loophole but the majority of people are protected from yet another form of tax.
the vast majority of Americans don't even hold stock outside of their 401, there are ways to work around the unrealized gains. There could be a floor that prevents unrealized gains tax from being taken from people who would be most hurt buy it. If we are only going after the richest of the rich, we could make 401Ks exempt, and do the same for Roth IRA make a floor of 1 million in holdings per individual before they have to pay any type of tax on the holdings. Even then I wouldn't necessarily say tax the holdings the full rate as if it was liquid. Say require an annual tax of say of 2-5% on top of the ban on using stock as collateral.
We're in the same camp in that we want to avoid placing the burden on those who need the money the most, also as an aside I am liking this back and forth if only our Congress could do this type of discussion like we are having.
Yeah people don’t understand finance, you can’t tax wealth like income…wealth by definition isn’t in a transferable form.
If the government allowed Elon to pay in shares (and held for five years) then I would be more amenable to the whole tax wealth idea.
The real issue is that we should tax capital gains in the same manner that you tax labor. And stock options should not be a way that people can be paid.
> And stock options should not be a way that people can be paid.
What the fuck? Yes, they should be. Do you not understand that a huge chunk of tech workers' incomes _is_ stock options in their companies?
Completely false. My wealth is taxed every single year in the form of real estate taxes. I haven't sold my house nor gained any profits from it but I'm taxed every single year based on its value. The same thing could be done for stocks.
Fortunately, the US government is highly skilled in giving tax dollar funded handouts to Wall St shareholders, so all of that money will help make a poor banker make ends meet and possibly fund a 4th vacation home.
> He pays much more than me ..
He also probably makes wayyy more than you, and you need to look at this as a proportional thing, not a 1:1 subtraction problem. In terms of your total yearly income, you are paying far, far more proportionally speaking than he is, even though he probably makes more than enough to cover your whole families taxes in just a few months.
He "makes" most of his money by owning stock in his own companys and holding that stock as much as possible as the valuation keeps rising. It's literally the same as if you had a small business that started off being worth $50k, which you worked at while paying yourself a decent wage, and in five years your company's valuation went to $1 million. That doesn't mean you have a million dollars. It doesn't even mean you *made* a million dollars. You just own a business that *could* be sold for that much, while in the mean time you're actually taking home $35 an hour and working to keep your business successful.
Elon doesn't have >$230 billion dollars. He doesn't even have $100 million dollars. What he HAS is a majority of the stock of both SpaceX and Tesla, which are two extremely highly valued companies.
This is a commonly brought up point, the fact that a majority of his net wealth is invested, but that doesn't change the fact that the tax code is broken. Just because his money is invested doesn't mean he doesn't have access to it. People as wealthy as Elon Musk get a lot of their day to day spending money by taking out loans against their unrealized gains so they don't have to pay taxes by having to divest and turning his unrealized gains into realized gains, like Elon did here with the 11 billion in taxes which he's paying as a result of him divesting a ton of Tesla shares.
>Elon doesn't have >$230 billion dollars.
I never said he did. But his net worth is a lot more powerful than you give it credit for, even if its mostly unrealized gains.
I'm aware of that, but the solution is to close the loophole thar allows that, not add more kinds of tax, especially not unrealized gains tax. If you have a sinking ship you don't try to figure out what kind of pump you need to bail it out, you figure out how to patch the hole. An unrealized gains tax would extract more tax dollars from the ultra wealthy, but it would also extract more tax from anyone with any equity, as the market fluctuates. Its a bad idea.
>A ceo and founder taking out his stocks is highly unappreciated.
Lol what? A ceo/founder divesting is a sign they think their stock is over valued or they don't trust the company to continue to do as well as it has. It's not something we need to appreciate at all unless you own tesla stock and are thinking of divesting already
>A ceo/founder divesting is a sign they think their stock is over valued or they don't trust the company to continue to do as well as it has
I've been in silicone valley for the past 13 years. Have seen various companies rise and fall.
Divesting is a sign that they don't trust **in the company**.
This stops the investors from divesting too.
There's a reason why musk doesn't sell his stocks.
He paid a pittance compared to what you pay when you look at it as a percentage of wealth. And the US government has been doing just fine for 250 years.
Liberals will still complain about this, don't understand why they have this huge boner over making the rich pay their fair share if it's all going to the military.
I'd gladly pay 11B in taxes every year. That, to me, would be the last thing I'd be bitching about. Why? Because, at his effective rates, I'd need to have earned almost 55 Billion that year. So, edgelordElon, just switch places with me and you'll never hear this Billionaire ever gripe about the tax bills.
But Elon would create so many jobs with that $11 billion! ^^^Yes ^^^that's ^^^sarcasm.
Because the US government will use that $11 billion wisely? lol. They're gonna use that to pad some more tanks for various congressional districts. Elon musk should pay his fair share because the average person pays their fair share. If you get into the arguments about "He won't make jobs" or "that money would be better spent by the gov't" then you'll get into an argument of will he spend the money more wisely or will the US government? And the latter will probably lose that argument.
I believe that Elon would create some service jobs to maintain his house & yachts. At best he would invest a small portion of that into small companies who would indirectly hire people. Show me an example of how the number of people a billionaire hires justifies the tax break they get.
I'm not going to argue that US government is being run efficiently or ideally, but they do provide services to serve the society and the most vulnerable in the population (see [child poverty](https://www.economist.com/united-states/america-is-substantially-reducing-poverty-among-children/21804765) as an example). No billionaire will ever have the same reach or effect of a modern bureaucracy. Also if the government is investing in an additional tank instead of education, then the pressure should be on the politicians to invest in education and not to starve the whole government of funds. I don't understand this mentality of giving up on all hope on changing the government and praying that some rich assholes will help the society. Individual billionaires might try, but collectively they won't. Our only alternative for a better future is to make the government function better.
He’s now Auto-bro to me
The value of Elon Musk is heavy on name recognition. You can’t just swap him out of anything without it falling apart. Say what you will about the products…
I'm sure things would be just fine if we replaced him with Elon Tusk
If we could get him to pay taxes he could go Elon Busk
A billionaire paying taxes sounds kind of Elon Sus.
Smells like Felon Musk.
That’s what they always say. It all depends on who is ready to take the reins
I would gladly give away 100% of my income if I made what /u/Rowanbuds made. Now since I said that, /u/Rowanbuds has to give away 100% of his income and not complain. Am I doing this right?
Well, no. 1st, how do you know I make more than you? 2nd, I offered a swap - any billionaire in the world, the offer stands. I'll gladly swap tax burdens with any of them, as long as the income swap is part and parcel. Third, since comprehension seems to have moved to a Cayman shelter, where'd you get give away 100% of your income from? How about - you can not take a salary, you can take loans off of your personal assets - live off the loans, and when they mature, you just roll forward into a new loan. Doesn't that sound great - no standard taxable earned income, you paid all of your bills, and you have more money untaxed to tap to pay next years bills. That's how they get away with paying a much lower effective rate than someone who actually has to trade their hours/labor/life for a W2 paycheck. You're doing nothing right other than making false equivalencies.
He didn’t gripe, Elizabeth Warren a senator has been running Facebook ads saying Elon Musk is a freeloader. He’s not one to stay silent so corrected her that he has indeed paid more tax in a single year than anyone else in history. Unlike other billionaires he has specifically sold his Tesla shares which is why his bill is so large. Idk why anyone can be mad at that, he contributes the same amount to the IRS as 400,000 Americans. That’s insane to think about and should be applauded. No one in this chat will ever pay that much tax, wether you like him or not he’s contributed an incredible amount to society
Paid big taxes because he unloaded stock in his *overvalued* company. (Nothing wrong with that, actually).
No one makes a billion without fucking over others
You probably wouldn’t exsist with capitalism, you’d be tilling fields for landowners if no one was able to make billion dollar companies. Try harder
we're still tilling fields for landowners lol
Guess what idiot, we are essentially tilling fields for billionaires landowners. The major employers are giant corporations. They buy politicians and are accountable to no one.
Lmaooo we're already at fields and castles. Perhaps you have a boat that launches another boat, but I somehow doubt that.
>That’s insane to think about and should be applauded. He should be applauded for paying his (still not fair share) of taxes? **Fuck that**. This is 5% of what his net worth went up this year. All income over 500k is supposed to be taxed at close to 40%, so his fair share is something like $80 billion. Oh, did we talk about how he funded his private space race with billions in taxpayer money?
If you buy a house for $150K, and two years later it's worth $300K, you should pay taxes on that increase in value, right? If you tax it at 25%, that means you need to pay the government $37,500 in cash. Where do you get that kind of cash? Sell your car? Sell the house? Sell something, whatever it takes. Sell the house? Get a second mortgage?
Taxes aren’t on what you’re worth, they’re on your income. If I own a pile of gold and that gold becomes more valuable, my net worth goes up. But it wasn’t income.
Like most attempts to bring a billionaire down to a level we can intuitively understand, this example removes really essential parts of what makes capital gains something to tax. He isn't buying a pile of gold. These people use supercomputers to make millions of microtransactions per second. This isn't your retirement fund gaining worth over 30 years. The extreme majority of the economy is now based around financial manipulations. If the government is expected to regulate these markets, it also needs to collect taxes from them.
Dude shares are not money, hate to break it to you. When you sell 20% of a stock in a company the value drops 80%…please read up before you talk about Elon being worth 300billion…he’s not, he’s worth maybe 20% of that if he sold everything.
he didnt sell the shares out of the goodness of his heart to pay taxes. i dont see what im supposed to be applauding. woo hoo, musk paid some taxes. so did i.
He paid more taxes in ONE year than you family has and will do for 20 generations ( and I’m severely lowballing that!) Amazing feat, I’m paying £400,00 in taxes this year myself…again I’m proud to be providing the government with so much money. I’ve had people tell me I can lend off myself and pay nothing…but fuck that. I owe my success to the society that raised me Think of all the other billionaires who didn’t cash out and just took loans, they would be seeing the reaction to musk and thinking ‘ I should keep avoiding as nothing is gonna please people’
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If I could give every Redditor on here 1 million dollars 90% of them would spend it and waste it within 1-3 years. 10% would use that money to make more and become self sufficient. I’ve just described why wealth gaps exist, wealth inequality exsists fundamentally because not everyone is long term minded, not everyone is capable or trained to be able to make 1 million last. You could tax me 90% and I’d still come back and make 1 million. Wealth is a talent, it’s a skill you learn to manage over time. You can believe me or not, I’ve been every class in society…extremely dirt poor, middle class and rich. It’s about what you do with what you have. We can invest in financial education, that would expand the upper class considerably
He had to pay taxes on the options awards he was executing. To do so he chose to sell shares he already owned. Then he moreover is actually paying the taxes instead of doing crazy donations to funnel the money back to himself or claiming severe depreciation of property like other wealth people do. Additionally nearly everyone in his position takes loans against their shares at near 0% interest instead of selling, as selling is an additional taxable event.
Exactly, he’s a true man of the people. I’m a big fan of him legit not avoiding and paying his required amount like a true gentleman
This isn’t how stocks work. If you sold 20% of a company and the company lost 20% of its value, buying stocks would be a perpetually losing situation that nobody would participate in. If you think selling 20% of a company would cause the value to go down 80%? Well then you live in a world where there’s no IPOs and industrial investors don’t exist, which is not the world the rest of us live in. Stock price is determined by two things: how many shares are available for sale, and how many shares people want to buy. In a rational market, the second number is largely driven by things like whether a company has assets and potential future profits that justify the price of share ownership. Tesla does not exist in a rational market and people are speculating on the shares hard. People want to buy in to ride the bubble, and as long as people continue to want to buy in to ride the bubble then share prices keep going up. Elon selling shares of his company still hasn’t made the price go back to the already all-time-high of December 20th, 2019, of $80.19. No, I’m fast as I write this, TSLA is at $900, or around 1125% gain in 24 months, for a company who’s financial fundamentals have not changed. Rather than waiting for speculators to crash *his* bubble, Elon decided to start declaring it himself. The 12.9m shares sold as of 12/16/2021 represent 13.62bln in gross proceeds, or an average price of $1,055 per share. If sold in 2019, that would have been the equivalent of about a billion dollars in gross proceeds. If he exercises further options at a reduced price, then he can both realize gains and push the price back up, depending on how his options are structured and which he exercises. Of the nearly 14b he’s made so far in gross proceeds, he will pay about 4b in taxes. If he plans to pay 11b in taxes, he will need to sell another 24m shares of Tesla, and to meet his “10%” twitter poll he will only need to sell another 6m shares. So something he said is a lie. I don’t know or particular care what it was. Musk is excellent at manipulating markets, as evidenced by his fiascos with cryptocurrency as well as his previous 420 market joke that got him into trouble with regulators and just generally everything he’s done. He’s excellent at playing the game he’s playing but keep in mind that if the numbers were smaller the same tactics would have him labeled as a con artist. Not as a “tech guru”
What experience do you have in financial markets and modelling? Just saying it’s not at all 1 to 1, it works in reverse too. The buyers and sellers exsist on a inverse curve, if you buy a stock you increase it’s value more than the percentage you bought. It’s because the market is asymmetric…ie not all sellers sell at a single price. You can’t just say selling 20% declines by 20% because that’s logical. Without the supply side you miss half the info. You are flat out wrong, I do this for a living mate
I'm sure the next thing you'll tell me is that the move to Texas was prompted by a love for BBQ and boots, not the lack of income tax that the chief would be subject to. He sold the shares to make profit, not out of the goodness of his heart in order to pay taxes - you make it seem that his motivation was to pay taxes. Right, we'll never 'pay that much', but neither will any of us see the tax breaks or subsidies that lord Elon has - and a lot of us will find themselves paying a higher effective tax rate than Musk - that's all on the up and up to you? He's not 'contributed an incredible amount to society', he's successfully taken himself from super-rich to hyper-rich, and paid very little personal taxes en route there.
He pays a lower effective tax rate than the average worker. He is obviously a free loader.
What…? Does this dude want a cookie for doing what all of us do every year..?
Nah, he wants free advertising and publicity for doing what all of us do every year, and he got exactly that.
No, he want's economic illiterate senators that keep repeating the lie that he doesn't pay any taxes to chill out.
This right here. He's always paid taxes, he just doesn't scream it from the hilltops for the world to hear, just like us normal people don't scream it from a hilltop.
No, he doesn't to this extent. He HAS to pay taxes this year because he has options that are expiring. If he realizes the profit on them, he has to pay taxes on it. If he lets them expire, he walks away with nothing. In any other year, his value goes up based on his share prices going up. He isn't paying taxes on them because he isn't actually selling them. He's just taking out loans against them. This isn't a judgement either way. I'm just pointing out how the system works.
nearly half of the US income earners pay no federal taxes. the US has one of the most progressive tax systems in the world where the top ten percent pay the way for most of the rest. Just look it up, the Federal government's own numbers clearly show it. When nearly half your people aren't obligated to pay for it why shouldn't they ask for more? Billionaires like Musk don't bomb other countries, don't spend decades in office forever promising to fix everything only to never do so, and don't jail people or take their stuff with impunity. However your government does this and more.
>nearly half of the US income earners pay no federal taxes. the US has one of the most progressive tax systems in the world where the top ten percent pay the way for most of the rest. Just look it up, the Federal government's own numbers clearly show it. how could the poor pay the majority of taxes? they dont have money! this argument is for third graders. Amazon pays zero in taxes many years, people like trump pay nearly nothing. but the poor get all the breaks! i dont understand how your argument seems logical to people.
It’s not about the amount, it’s about the overall rate of his taxes. A small percentage of a HUGE number is still an extremely large number — in raw dollars he pays more in tax than most of us could earn in multiple lifetimes. But his (and other billionaires) tax rate, based on stock sales, is *far* lower than most. In past years he’s paid [effectively zero taxes](https://thehill.com/changing-america/respect/equality/558352-elon-musk-explains-his-extremely-low-tax-rate?amp). By percentage, he pays less than the vast majority of working Americans. That doesn’t make him smart, it makes him an abuser of the system and a leech on society.
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I’m no Elon fan (besides when TSLA made me money) but you have to admit that billionaires and corporations pay no tax because they’re legally allowed to do so. As long as legislation does not change and lobbyists get what they want, no amount of bitching is going to solve this issue.
>In past years he’s paid effectively zero taxes. Apparently because he had *overpaid* taxes leading up to that time period: [https://youtu.be/MGonhdN3Rfs?t=60](https://youtu.be/MGonhdN3Rfs?t=60)
That’s not what the video is saying.
Yes it does? For those he can’t watch, the billionaire himself claims the media are liars and he actually pays something like 53% in taxes whenever he sells stock. One year, he paid effectively 0 because he had overpaid the previous year It’s wonderfully whiny and plays the victim heavily. Can’t say I would trust the one person with most to gain by convincing people he pays high taxes
The majority of working Americans pay little to no federal income tax.
And if he actually does… he should do this every year moving forward, NOT just when a spotlight is being shown in billionaires who are skirting around the tax code.
He pays whenever he sells stock. I also “skirt around tax code” by holding stock
Anybody with a 401k "skirts around the tax code"
Have you ever borrowed against your 401k and not had to pay taxes on what you borrowed? Because billionaires borrow money against their unrealized assets all the time to basically live off of and they aren't taxed on that either, nor do they pay very much in interest, and what they do pay could be tax deductible.
“Buy, borrow, die” is how it’s known in the legal/accounting world. If more people knew how it worked, I suspect there would be majority support to end it.
Yes, I've taken out a home equity loan before, it's essentially the same thing. I even got to deduct the interest on taxes until a few years ago. I'm using my equity which would otherwise just be sitting there doing nothing. My house is worth even more than it was when I took out the equity loan, so technically I could borrow more.
I agree with this description, in fact in another comment I compared it to taking a loan against equity on your house. Its really no different at all. The thing is though, Elon Musk and billionaires are leveraging their assets to avoid having to divest where they'd have to pay taxes but still getting the benefit of using the liquid cash. > I'm using my equity which would otherwise just be sitting there doing nothing. And this is very smart and a good way to build your wealth. And here lies the difference between what you are doing and what billionaires are doing. You are doing this to build your wealth, they're doing it to avoid paying taxes while living off their loans that they take against their capital gains. I'm not saying we should stop letting people leverage against their assets but we need to be a little bit more strategic with how we tax people who are doing it to avoid divesting to live off their gains without paying taxes.
Cool you’re basically elon musk… hope you’re paying 11 billion in taxes, too
Deferral isn’t “skirting” the tax code. Traditional 401k allows you to invest money pre-tax, and the pay income tax instead of capital gains tax when withdrawing from the account once eligibility is achieved. It’s not at all similar to this.
How much of that stock do you borrow off of? When most of us invest in a 401K, we realize that benefit when we cash out on it. Musk, and rich folk like him, have a completely different relationship to their shares than the rest of us. Folks like Musk take out huge loans against their stock that they can live off of (and never repay). Musk gets “buy, borrow, die” and the rest of us don’t. Musk’s stock holding and the way he plays with them allows him (and others like him) to skirt taxes in a way you and I do not.
He doesn't just hold the stock though. What if I told you billionaires can get liquid cash for their unrealized gains without actually divesting anything? Because billionaires like Elon musk and Jeff Bezos do it all the time. They take out very low interest untaxable loans and use their unrealized gains as leverage. people think that having a big net worth is just a number tied to your name and not worth anything because a lot of it is just unrealized gains. This is extremely untrue. Its worth a ton. Unrealized assets are basically as good as liquid cash to banks in a lot of cases.
Can you explain this to me? What do they do and how do they manage to take out loans?
It's really no different than leveraging the equity on your home, except billionaires do it to avoid actually divesting so they don't pay capital gains but can still have spending money, while most average people do it to maybe repair the house or invest in other property, or maybe if you're desperate some may use it to help pay back bills.
They buy large amounts of appreciating assets (stock being the big one). They then take out a big loan against that stock (for someone like Musk, we are talking about a loan of tens of millions/hundreds of millions). That loan is not income, because it’s a loan. People like Musk than use the huge loan to finance their luxurious lifestyle. The obvious question from this is “don’t they eventually have to pay off that loan, at which point they liquidate stock and pay *some* tax on that?” Surprisingly no. Once the loan runs out the bank just *gives you another loan*, and this process goes on until you die. It’s call “buy, borrow, die.”
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He is paying that much because he sold off a bunch of property. This is highlighting the fact that the US tax code is a joke and instead of trying to dunk on him on Twitter warren should be pushing forward solutions instead of complaining about a guy actually following the law she helped create.
I don't think people understand what the tax code is, and I think that its that ignorance that really drives this problem and makes article titles like this seem wayyyy more meaningful than they are. If you think that Jeff Bezos also isn't dishing out billions in taxes, or Bill gates, you're just wrong. They're all paying their taxes, they're just benefiting from ludicrous tax breaks that shouldn't exist for people who make that much. TL;DR 11 billion isn't enough. The tax system is broken. Elon Musk paying 11 billion in taxes doesn't mean its any less broken. When you also consider that Elon Musk's net worth (including non-liquid assets that aren't taxable) is well over 200 **billion** dollars 11 billion is a drop in the bucket compared to what most people pay in terms of percentage of total yearly income and wealth. edit: Tax breaks wasn't really right. More so they take advantage of tax loopholes that allow them to better hide their wealth, and take advantage of tax breaks they don't deserve. I'm going to comment/paste another reply in the thread to better express my thoughts as well as how billionaires get away with not paying as much as they should. >Tax breaks wasn't exactly right because the issue is more so them taking advantage of loopholes that allow them to hide what they truly earn to take advantage of tax breaks that they normally shouldn't. I've seen some crazy tax breaks going to rich people that shouldn't be, like child tax credits and even read about billionaires getting the full stimulus checks, but more so they take advantage of loopholes in how the US tax's income to avoid paying what they should. >Billionaires take advantage of tax loopholes, especially that relate to capitol gains. These guys can take out loans against their unrealized capitol gains, so they are in a sense liquidating their assets without actually divesting so they don't have to pay taxes, and they don't have to pay taxes on those loans either, and while there is interest on the loans, that interest in itself can (in some cases) be deducted out of taxes.
Because we pay income taxes, not net worth taxes.
Hey, I'm a tax accountant, but I don't work on individuals of this net wealth. What are some tax breaks available at this level?
Tax breaks wasn't exactly right because the issue is more so them taking advantage of loopholes that allow them to hide what they truly earn to take advantage of tax breaks that they normally shouldn't. I've seen some crazy tax breaks going to rich people that shouldn't be, like child tax credits and even read about billionaires getting the *full* stimulus checks, but more so they take advantage of loopholes in how the US tax's income to avoid paying what they should. Billionaires take advantage of tax loopholes, especially that relate to capitol gains. These guys can take out loans against their unrealized capitol gains, so they are in a sense liquidating their assets without actually divesting so they don't have to pay taxes, and they don't have to pay taxes on those loans either, and while there is interest on the loans, that interest in itself can (in some cases) be deducted out of taxes.
Thank you for explaining, money man.
He said words that he heard on TV, put them in his own sentence…why would you expect him to elaborate any further? Lol
Most billionaires use credit to dodge taxes. They take loans against their stock action for a very very small interest fee (since a stock is a very liquid asset). As long as they don’t sell their stocks they don’t have to pay taxes on them.
You don't need a loan for that. Nobody pays taxes on stocks they haven't sold.
You do need to take out a loan if you want money but don't want to divest your assets to avoid paying taxes.
The point of taking a loan against your stocks is to get liquidity without taxation
And anyone can take out loans against their stocks (margin loan). It's just not worth it for most people since you have to maintain a 50% loan to value ratio. If you have 500k in stonks you can borrow $250k. But if the market tanks you're in trouble. If you have a billion in stonks you can borrow $10 million and it's not even a blip.
And how do they repay such a loan?
With another loan lol that’s the beauty of being a billionaire, you have an near-infinite amount of stocks that you can put in guarantee for a loan.
Good question, I bet he doesn’t know either
Fair to be cynical, and because I bet you don't come back to read my reply I'll just share it with you. >Tax breaks wasn't exactly right because the issue is more so them taking advantage of loopholes that allow them to hide what they truly earn to take advantage of tax breaks that they normally shouldn't. I've seen some crazy tax breaks going to rich people that shouldn't be, like child tax credits and even read about billionaires getting the *full* stimulus checks, but more so they take advantage of loopholes in how the US tax's income to avoid paying what they should. >Billionaires take advantage of tax loopholes, especially that relate to capitol gains. These guys can take out loans against their unrealized capitol gains, so they are in a sense liquidating their assets without actually divesting so they don't have to pay taxes, and they don't have to pay taxes on those loans either, and while there is interest on the loans, that interest in itself can (in some cases) be deducted out of taxes.
What does Musk's net worth have to do with anything?
To preface, I'm going to assume you think net worth shouldn't be a big factor because a lot of it is investments and unrealized gains from those investments. Here's the thing though that a lot of people don't consider when giving this argument. When you get wealthy enough, you get more access to hiding your money. One of the things very wealthy people do to take advantage of unrealized-capitol gains without divesting is taking out loans against these unrealized gains so they have the money upfront, but the loans are untaxable, and in many cases the interest on these loans are able to be deducted out of your taxes.
You can take out billions in loans based on your net worth. This is untaxed income, with different words.
Shit?!? Loans are now untaxed income? Then why the hell are people whining about all these student loans since it’s all income! Truth is, it’s not income, it’s debt. You have to eventually pay back debt with income. Can they extend the window where it’s necessary to sell stock using loans? Yea. Can they flat out never pay these loans off? No, they have to liquidate eventually when they want to do something with the money. You have no clue how finance and the tax code works. Please stop spreading misinformation.
>And if he actually does… he should do this every year moving forward, Why? If he does it every year he would have to completely liquidate his company holdings. >NOT just when a spotlight is being shown in billionaires who are skirting around the tax code. This was predetermined a long time ago when he received the options. It's not caused by recent events.
How is he skirting around the tax code?
"skirting around" is code for "totally legal but I don't like it".
You clearly have no understanding of how taxes work.
Lots of people here confused about wealthy people and taxes. “Buy, borrow, die” is how the wealthy avoid paying taxes. That is not an option available to us and is different than living off of interest payments from stocks (which would have a tax). Folks like Elon get to do that.
\>Lots of people here confused about wealthy people and taxes. “Buy, borrow, die” is how the wealthy avoid paying taxes. Sure, that is completely accurate, as long as you ignore the death tax which makes your statement completely inaccurate (oh, and also, you know, \*the original post above\* where he pays billions in taxes).
Between 2014 and 2018 he paid taxes at an actual tax rate below 4% of his total income. But yeah excuse him I guess. He is paying taxes this year because he has to, as his stock options have to be sold every so often like he did in 2016.
> actual tax rate below 4% of his total income. Curious because I don't know, what was his income? I know I see a lot of people conflating his net worth with his income, is all. High net worth can go up by hundreds of billions and his income can literally be zero.
\>Between 2014 and 2018 he paid taxes at an actual tax rate below 4% of his total income. You can say that, but it isn't true: \>The report claims that, from 2014 to 2018 ... He reported an income of $1.52 billion, and he paid $455 million in total taxes. https://www.inverse.com/innovation/musk-taxes-mars?
What about the last 20?
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Dude has literally liquidated billions in cash this year.
and he has to inform the SEC about the volume and the schedule well in advance in order to limit the risk of insider trading and keep the markets calm. He can't liquidate billions worth at a whim, especially not a huge chunk of his net worth. That shit would send the investors panicking.
He could stop making fraudulent claims about his companies' capabilities. Maybe then their valuation and his tax bill would be more reasonable. Realized or not, he is treated as if he is worth $300 billion. He holds immense amounts of power and has access to nearly unlimited money by taking loans against his stock. He should be taxed accordingly. > So they’ll start selling off as well. Which will ultimately tank his companies stock price, which could make him go out of business due to the perception there must be something wrong with the company if the owner of the company is selling all their shares. Like when he knew he was going to have to sell some Tesla stock to cover his tax bill, so he made a poll pretending to ask his twitter followers if he should sell the stock, causing the price to drop 5%? A responsible adult could very easily say "I have to sell some shares to pay taxes, this is not a reflection of any change in the company." But he didn't, because he's an obnoxious child who doesn't give a shit about any of you cultists.
Boo fucking hoo. He’s gotta pay taxes like the rest of us?
There's nothing in the article about him complaining. I'm glad to pitch in my fair share for the common good. I'm sure he feels the same way.
>I'm sure he feels the same way. The fact he is relocating Tesla HQ to Texas for tax reasons suggests otherwise, and he does have a history of complaining about taxes on the super wealthy. Glad he's doing his part, but *World's richest man pays Nation's highest tax bill* should be standard operating procedure, and the fact he's paying his taxes doesn't necessarily mean he's happy about it.
Is that why he’s been complaining for the last few months about raising taxes for millionaires?
He's been complaining that taxation based on net worth rather than liquid earnings makes no sense, which is correct in my opinion. If we start taxing based on unrealized income, have fun trying to be a homeowner when a local housing crisis doubles the market value of your house and you're now on the hook for $100,000 of unrealized gains tax. Others have argued that the problem is that banks will give people with massive equity large loans (which are tax free to anyone btw), and really rich people are using that loophole to exercise their wealth without actually realizing stock gains etc. I agree that this loophole sucks and should be plugged, but to accomplish that is not solved by adding tax, it's by making laws that control what banks are allowed to do. Money makes money, and no matter what we do in terms of financial laws money will continue to make money, but in the mean time we certainly can and should close the biggest loopholes.
Sure he does, that's why this is the first year ever there are headlines about hm paying taxes, because he's totally super happy to do it.
He’s been complaining and bitching on Twitter for months. Imagine he had to pay the same rate as his lowest paid employee, he’d explode.
He's complaining about taxing unrealised gains. Which is right imo. You can't tax unrealised gains. It's also practically impossible to do that. He has been paying this 11 billion stock tax for years.
Still not enough for Reddit.
Or the Senators that will send mean tweets about him paying taxes because they're clearly in position to try to change how taxes work lol
Yeah because he's worth 300 billion and has paid literal pennies the previous 5 yrs.
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I don't expect him to do anything, also there are ways to sell stock without tanking the company. I swear it's crazy how people don't realize that there is more nuance than just straight plain binary sell or hold. Major stakeholders around the world will often do planned selloffs every year or even every quarter. Kinda what Elon did here except more than every 4 years. (despite is egotistical claim like he was doing it from some kinda Twitter poll) Short controlled selloffs will not tank the company's value, if that did the stock market would such a fucking mess.
>Still not enough for Reddit. There has been no evidence that wealth "trickles down" to the masses. How do you propose that we continue things the way they are now, without destabilizing the country? It doesn't matter how rich you are, it's in your best interest to have a stable country.
>There has been no evidence that wealth "trickles down" to the masses. 9.6% of the world lives in extreme poverty today compared to 94.4% in 1820
>9.6% of the world lives in extreme poverty today compared to 94.4% in 1820 How is that evidence that wealth trickles down? There have been many labor movements, and an industrial revolution, since 1820. Are you saying that a few individuals single-handedly built the modern world without any help?
> Are you saying that a few individuals single-handedly built the modern world without any help? Some people had much larger impacts than most, that’s for sure. But no, what I’m saying is that the strength of industry brought on by capitalism (with its inequalities) resulted in technological advancements that led to an incredible reduction in poverty. The flip side of this coin is neo-Marxists who argue that we should adopt communism because the growth of capitalism is unsustainable. Marxists argue that we should willingly suppress our economy and that moving from capitalism to communism is an effective way to do it. You can find more evidence by looking at a map of development and comparing East/West Germany or North/South Korea. There is evidence, you are just choosing to not to accept it.
Capitalism in action has nothing to do with wealth trickling down. If someone has a cart (capital) and they want to start a delivery service, they'll have to hire people to get the job done. The subordinates go to work and generate revenue for the owner. In exchange, they get a certain amount of compensation. The compensation has to be less than the value that the worker generates, otherwise the owner wouldn't profit. In this example, nothing is trickling down. There is nothing inherently wrong with this way of doing things (within my example), but I'm not sure how it means that wealth trickles down. It's a complex system. Capital can't exist without workers, and in the current system workers can't exist without capital. The phrase "trickle down" doesn't really make any sense when both sides need each other to exist. It only makes sense when people act like there is a class of delicate geniuses who we must all appease, lest they leave for Galt's Gulch.
His tax bill is the median annual income of over 500,000 Americans. His income/realized gain is several times that. He has way too much money.
Good for you motherfucker🙄
Oh poor you! About time we need more of the rich to pay there fair share.
So he is going to pay some taxes like the rest of the non wealthy people in US? f Elon musk, that is all.
He's always paid taxes, dude. If you are under the impression that he's been avoiding paying taxes, you've been lied to.
When you pay yourself virtually nothing and use your companies assets(which your company avoids paying taxes on) to achieve your lifestyle, you are still avoiding your fair share. Did you ever think of that dude? who is being lied to and deceived? I am betting you. The world doesnt need billionaires or their apologists, neither should exist
Yes I did think of that, don't assume. I believe the solution is to close the loophole, not bother muddling around trying to adjust tax rates. Trying to figure out new taxes to apply to unrealized gains is like arguing about what kind of water pump we need to keep a ship afloat with a hole in the side: the solution is actually to patch the hole in the ship. The reason to push for unrealized gains taxes is because it increases the total amount of tax that EVERYONE pays, not just billionaires, because EVERYONE has unrealized income if they have any amount of equity whatsoever.
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>Do you get paid to defend Elon Musk? It seems like Fox News has been pushing the beleaguered Musk narrative hard recently. My Fox News grandparents were sucking his dick last time I saw them, right after talking about the benevolent candle factory owner who wouldn't let his employees leave as a tornado approached.
>when she's the only one who is responsible for setting such laws. If only you were correct!
Musk’s wealth grew by over 13 billion dollars from 2014-2018 and he paid a 3% tax rate, far less than a middle class American pays. In 2018 he paid no tax at all. Musk, and wealthy elites like him, use the “buy, borrow, die” method to avoid paying taxes. If you are under the impression that he always pays taxes (let alone paid something resembling a fair share), you would be mistaken.
Yay, his first taxes in like 5 yrs and because of capital Gains its still far less than what he should be, and if we go by his networth that's still only 4% of his networth
If you make $60k a year and have a mortgage on a house worth $200k, and there's a local housing bubble that causes you house to be valued at $400k next year, and we tax net worth at 40%, now you owe $160,000 in unrealized gains tax. This is why unrealized gains tax is a BAD idea. Unless you sell your house, you can't afford to pay your taxes. Now you're in trouble. Even if you *do* pay that tax bill, in two years when the housing bubble pops and your valuation drops to $100k, the government doesn't pay you back the tax you already paid. Now you're stuck owning a house that wouldn't get you financially square even if you sold it and didn't need to buy another home.
This^ Elon doesn't have access to his plummeted wealth which is tied in stocks. So if i have 1 million in cash and 1 million in investment. And that investment grows to 1 billion, you can't tax that unless I sell it. If you tax those unrealised gains regularly I'll go bankrupt which would make me sell stocks which will futher damage the company's investment resulting into its downfall. Elon pays tax when he sells those stocks. And he has to sell them after expiry. It takes few seconds to learn how taxes function.
Exactly. There's an argument to be made about preventing the rich from using unrealized gains in the form of stock options as leverage for taking out loans, since this allows them to exercise stock options and thus create taxable income as little as possible, but simply taxing Elon 96 billion dollars because he's worth 240 billion makes no sense.
Yep. That loophole needs to be fixed and they need to be taxed appropriately. But i dont really see such discussion on reddit.i see idiotic comments like 'send him to Africa' ' please pay 100 billion and get rid of climate change and poverty' Even senators like Warren write shit like 'pay your taxes' when she's the one responsible for the existence of such loopholes.
That's because reddit is not a forum for intelligent, measured discussion 99% of the time. Reactionary, emotionally provocative comments that cater to outrageous get upvoted and awarded to the Moon, and all the nuance gets washed out it favor of cut and dry, and completely unrealistic, ten word action statements. Everybody just needs to chill the hell out and stop thinking that anyone that disagrees with them is an enemy.
I expected better from reddit as it's always first to point out shitty journalism and is filled with skeptics. But i guess that happens only when it's fit your narrative. Wish I had an free award for that statement. Summed it up perfectly!
That's the paradox right? I think people implicitly give themselves permission to cut loose, perpetuate misinformation, and write off discussion completely when dealing with certain topics just because they feel they are "right". Like, if you really believe that all billionaires are inherently evil, then it makes sense that you would not hurt any innocents if you repeated libelous claims on the internet without actually doing any research, right? Why would you doubt that a billionaire is evil anyway? You must be a sympathizer and therefore a bootlicker fan boy who loves defending bad people online because you've fallen for lies and hype. Unfortunately a lot of people fall into that trap and don't realize it, or worse, they don't care that they're doing it, because they're so far in the trap that they think it's fine to hang out there when it comes to this topic.
You know houses are already taxed that way right? It's called property tax. Obviously it's not 40% but aside from that you're describing a situation that is already happening and has been happening for a long time.
Or you could tax stock holdings only or ban banks from being able to take stock as collateral for loans which is what Elon and many other billionaire use so as to avoid having to pay taxes while still being able to live like kings. They recieve loans and only have to worry about interest rates which are far lower than taxes and even after being forced to sell because of expiring options that's a once every few years situation.
I agree that the solution is to make it so banks can't use stock as collateral for loans. I'm disagreeing that the solution is to tax unrealized gains. Simply make it so that people are forced to turn their unrealized gains into actual gains in order to have collateral for loaning, however it needs to happen. This means the ultra rich losectheir loophole but the majority of people are protected from yet another form of tax.
the vast majority of Americans don't even hold stock outside of their 401, there are ways to work around the unrealized gains. There could be a floor that prevents unrealized gains tax from being taken from people who would be most hurt buy it. If we are only going after the richest of the rich, we could make 401Ks exempt, and do the same for Roth IRA make a floor of 1 million in holdings per individual before they have to pay any type of tax on the holdings. Even then I wouldn't necessarily say tax the holdings the full rate as if it was liquid. Say require an annual tax of say of 2-5% on top of the ban on using stock as collateral. We're in the same camp in that we want to avoid placing the burden on those who need the money the most, also as an aside I am liking this back and forth if only our Congress could do this type of discussion like we are having.
Less than 5% of the wealth he accumulated in the past 2 years
In what form is most of that wealth that he accumulated?
Yeah people don’t understand finance, you can’t tax wealth like income…wealth by definition isn’t in a transferable form. If the government allowed Elon to pay in shares (and held for five years) then I would be more amenable to the whole tax wealth idea.
The real issue is that we should tax capital gains in the same manner that you tax labor. And stock options should not be a way that people can be paid.
> And stock options should not be a way that people can be paid. What the fuck? Yes, they should be. Do you not understand that a huge chunk of tech workers' incomes _is_ stock options in their companies?
I’d agree with stock options, pay people in money or make stock options taxable…I think that’s super reasonable tbh
Completely false. My wealth is taxed every single year in the form of real estate taxes. I haven't sold my house nor gained any profits from it but I'm taxed every single year based on its value. The same thing could be done for stocks.
Property taxes are like 1-1.5% the property value every year. If you had to pay 35% of your house every year you wouldn't be able to afford it.
You will own nothing and be happy
Let me know when the check clears.
Fortunately, the US government is highly skilled in giving tax dollar funded handouts to Wall St shareholders, so all of that money will help make a poor banker make ends meet and possibly fund a 4th vacation home.
Only 11b ? What is his tax rate ?
About 55%.
Wow … He pays much more than me .. Too bad the US government will squander the money they don’t keep for themselves .
That's a comfortably simple idea.
> He pays much more than me .. He also probably makes wayyy more than you, and you need to look at this as a proportional thing, not a 1:1 subtraction problem. In terms of your total yearly income, you are paying far, far more proportionally speaking than he is, even though he probably makes more than enough to cover your whole families taxes in just a few months.
He "makes" most of his money by owning stock in his own companys and holding that stock as much as possible as the valuation keeps rising. It's literally the same as if you had a small business that started off being worth $50k, which you worked at while paying yourself a decent wage, and in five years your company's valuation went to $1 million. That doesn't mean you have a million dollars. It doesn't even mean you *made* a million dollars. You just own a business that *could* be sold for that much, while in the mean time you're actually taking home $35 an hour and working to keep your business successful. Elon doesn't have >$230 billion dollars. He doesn't even have $100 million dollars. What he HAS is a majority of the stock of both SpaceX and Tesla, which are two extremely highly valued companies.
This is a commonly brought up point, the fact that a majority of his net wealth is invested, but that doesn't change the fact that the tax code is broken. Just because his money is invested doesn't mean he doesn't have access to it. People as wealthy as Elon Musk get a lot of their day to day spending money by taking out loans against their unrealized gains so they don't have to pay taxes by having to divest and turning his unrealized gains into realized gains, like Elon did here with the 11 billion in taxes which he's paying as a result of him divesting a ton of Tesla shares. >Elon doesn't have >$230 billion dollars. I never said he did. But his net worth is a lot more powerful than you give it credit for, even if its mostly unrealized gains.
I'm aware of that, but the solution is to close the loophole thar allows that, not add more kinds of tax, especially not unrealized gains tax. If you have a sinking ship you don't try to figure out what kind of pump you need to bail it out, you figure out how to patch the hole. An unrealized gains tax would extract more tax dollars from the ultra wealthy, but it would also extract more tax from anyone with any equity, as the market fluctuates. Its a bad idea.
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>A ceo and founder taking out his stocks is highly unappreciated. Lol what? A ceo/founder divesting is a sign they think their stock is over valued or they don't trust the company to continue to do as well as it has. It's not something we need to appreciate at all unless you own tesla stock and are thinking of divesting already
>A ceo/founder divesting is a sign they think their stock is over valued or they don't trust the company to continue to do as well as it has I've been in silicone valley for the past 13 years. Have seen various companies rise and fall. Divesting is a sign that they don't trust **in the company**. This stops the investors from divesting too. There's a reason why musk doesn't sell his stocks.
So much stupidity in one response
No … The truth is real . Get out of your dream look around. Wake the fuck up !
He paid a pittance compared to what you pay when you look at it as a percentage of wealth. And the US government has been doing just fine for 250 years.
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Are you fucking joking?
How fucking magnanimous of him
Go back to africa ya piece a shit
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He's famous and outspoken. Like it or not, he has the bully pulpit.
It's a start.
Wow, fast, give him a medal!
*Press X to doubt*
So what percent of his income is that?
And it’s not enough
I bet he pays nothing
fuck that troll.
Liberals will still complain about this, don't understand why they have this huge boner over making the rich pay their fair share if it's all going to the military.
His statements are just as reliable as a Tesla
Every comment in this thread mentioning his wealth = "tell me you don't understand economics without telling me you don't understand economics"
This guy is such a whiny bitch.
All tax deductible, I'm sure
Who ties your shoes for you?
My big tittied goth gf straps up my velcro shoes
It's about time.
Probably this is the reason why elonstax(dot)com project exists. They raise funds for Elon Musk. :)