By Nikhila Natarajan
New York, Nov 10 (IANS) Clearly, two of the costliest tweets in the history of Global Inc – and who else but Elon Musk, the world’s richest man, to have bunged them in.
“Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock,” Musk asked by way of a “yes” or “no” poll on the microblogging platform over the weekend.
Not satisfied with the poll, the maverick mega billionaire followed up six minutes later, stating: “I will abide by the results of this poll, whichever way it goes.”
The result out there in full public view was stark: 52:48 in favour of Musk selling 10 per cent!
By then Musk had shut off any clause to escape the bears: “Note, I do not take a cash salary or bonus from anywhere. I only have stock, thus the only way for me to pay taxes personally is to sell stock.”
The bloodbath that followed sunk Tesla stock by $200 billion (market capitalisation was $1,211 bn on Friday end of day and $1,023 bn on Tuesday 48 hours later).
Musk’s own net worth took a $50 billion beating.
“Bizzare,” was the refrain to him employing a methodology as unscientific as a Twitter poll with a random lot of 3.5 million folks determining the outcome.
The context of Musk’s tweet is about growing ire against Big Tech and the uber rich. It follows a proposal by Democrat Senator Ron Wyden to tax investments every year for US billionaires, unprecedented given that the US so far taxes stock investments only when they are sold.
Musk has publicly pushed back against Wyden. Wyden, chair of the Senate Finance Committee, hit back.
“Whether or not the world’s wealthiest man pays any taxes at all shouldn’t depend on the results of a Twitter poll. It’s time for the Billionaires Income Tax,” he tweeted.
It hasn’t helped Tesla stock that Musk’s brother Kimbal had sold some shares just before the survey.
ProPublica has claimed that Musk paid no federal income taxes in 2018, and his “true tax rate” between 2014 and 2018 was 3.27 per cent. To determine what it is calling the “true tax rate,” ProPublica says it “compared how much in taxes the 25 richest Americans paid each year to how much Forbes estimated their wealth grew in the same period”.
Musk has contested ProPublica’s argument as “misleadinga”and “trickery.”
Michael Burry, “The Big Short” investing wizard has said Musk may want to sell stock to cover personal debt.
(Nikhila Natarajan tweets @byniknat)
By Nikhila Natarajan