The richest person in the world, Elon Musk, has twitted that he will pay $11 billion which is 8.3 billion pounds tax in this year.
Elon Musk has been involved in the debate on social media with the public about “how much tax he pays.”
Elizebeth Warren, the Domestic Senator, has twitted earlier this week that Mr. Elon Musk should stop “free-rider off everybody”.
And the billionaire responded, “for those admirers, I will pay around $11 billion tax in this year”.
Earlier this year, Mr. Elon Musk has become the richest person in the world and he is the founder and maker of electric car Tesla and aerospace manufacturer SpaceX.
Whereas, index of billionaires Bloomberg places his wealth at $243 billion, while SpaceX is worth around $100 billion and Tesla is worth around $1 trillion.
Mr. Elon Musk was declared as Time Magazines Person of the year, in the last week. That has given rise to a lawmaker Warren to tweet, “Let’s modify the equipped tax code so the person of the year will actually have to pay taxes and finish the free-rider of everybody”.
Joe Biden, President of the US is impatient to increase taxes on the wealth even though the legislative plans have stalled in Congress until now.
Ms. Warren including other legislators has promoted the idea of taxing not only the rich American’s income but also on growing values of assets that they are holding such as shares.
Many of the wealthiest citizens of America do not take direct taxable salaries but instead, they hold their earnings in terms of shares or some other investments and then take loans by using those assets as security and guarantee.
Mr. Elon Musk responded by saying, “he could be paying more tax than any American this year according to history” to the tweet done by Warren.
Mind-Boggling
Robert Willens, Professor and tax expert of Columbia University addressed, that was a fair comment from Mr. Elon, who has made himself responsible for such mind-blowing amounts of income tax in the year 2020 via, analyzing stocks choices that would expire and become valueless.
The Stock choices are deals that the user can purchase stock at a defined price in the forthcoming years.
Mr. Willens further added that the present value of shares of Tesla is considerably high than, when Mr. Elon was permitted the option of the original stock, so the cost he acquired by employing those options could be appreciable and it is counted as taxable income.
He explained that Mr. Elon Musk perhaps felt that it would be well-judged in order to generate as much essential taxable income as possible in the year 2021, on the assumption that in the year 2022 the income might be taxed at higher rates.
Further, Mr. Willens added that if more radical measures of congress were enacted then that would be left a big impact on the liabilities of Mr. Elon Musk.
However, the size of tax payments of Mr. Elon Musk would be made next year and will go to authorities of federal tax, but the California state where Mr. Elon’s Tesla has been situated until now will also demand a part or a portion.
During this month earlier, Tesla declared in Security Exchange Corporation (SEC) of United States classifying that it was shifting its corporate headquarters to Texas, this plan Elon Musk had intimated for a few months in media interviews, mentioning sadness with the state government laws of California and blaming the high-pricing living in Silicon Valley.
Whereas according to thinktank, the Tax Foundation, Texas involves more lenient tax rules, in contrast to California, it doesn’t collect income tax which belongs to high-income rates of tax around the state of US $14 billion of shares of Tesla, on which Mr. Willens addressed, was his part of generating cash in order to satisfy his tax liabilities.
However, he also stated that the numbers included in Elon Musk’s case were extraordinary, this was a corporate executive’s standard approach to buy to expiring stock options.
