Tesla CEO Elon Musk, a famous Twitter junkie, felt it would be a great gesture to allow the platform’s users to determine whether or not he should pay more taxes, so he created a poll. Musk questioned the Twitterati if he should liquidate 10% of his Tesla shares, stating he was willing to honor the poll’s findings. Yes, according to Twitter. The software tycoon initiated the poll on Saturday in response to a new proposed law to tax unrealized gains – profits that exist only on paper and do not become reality until the asset is sold – which critics have claimed allows billionaires to avoid taxation.
For background, Musk emphasized that he solely receives equity compensation from his firms and does not get a cash income or incentives. As a result, “the only option for me to pay any taxes myself is to sell shares,” he explained. As per the Wall Street Journal, Musk controls more than 17% of Tesla shares, which is worth upwards of USD 200 billion. At present pricing, selling 10% of it would be worth nearly USD 21 billion. “Because much has been made recently of unrealized profits as a tool of tax evasion, I suggest selling 10% of my Tesla shares,” Musk stated in the tweet that accompanied his poll, adding, “I will comply by the results of this vote, whatever way it goes.”
In Musk’s survey, 3.5 million individuals voted, with 57.9% saying he should trade and 42.1% saying he shouldn’t. Nevertheless, the Twitterati hasn’t heard anything more from Elon regarding the matter since the vote was tallied. Musk claimed he was willing to accept any conclusion in response to a tweet asking if the poll proceeded exactly how he intended it to. Last month, Musk criticized Senate Finance Committee Chairman Ron Wyden, a Democrat from Oregon, for proposing to tax unrealized gains on publicly listed investments, claiming that the proposition would eventually reach less rich tax-paying citizens.
For whatever that’s worth, Wyden’s plan was scrapped almost immediately after it was submitted, but it ignited an important discussion, which Musk chose to enter. Though Musk marketed this as a method for the people to determine what he does with his wealth, CNBC notes that the Tesla executive was likely to sell stock even if Twitter hadn’t pulled a ‘Palpatine’ and told him to. This is due to Musk’s billion-dollar tax payment on the 22.8 million shares he received as stock options in 2012. To execute these options, Musk must pay income taxes on the amount he has earned on the stocks at their present price, which amounts to almost USD 28 billion. The Tesla CEO seldom sells shares he already owns, although he has done so in the past to pay taxes on stock options. Musk’s survey and its findings sparked a lot of discussion on Twitter. To put it all into context, a study published this summer revealed that Musk owed no income tax in 2018. So, yes, any income tax he pays is a modest step forward.