Musk said he paid $7 billion in state and federal taxes this year and estimated he would pay another $5 billion by January 1.
The announcement comes as Elon Musk and other billionaires face growing scrutiny over the amount of tax they pay. Musk does not receive salary or cash bonuses in his role as Tesla CEO and is instead compensated for stock awards. When it needs money, it can borrow by using stocks that do not meet the same tax obligations as collateral. The biggest difference this year is that Musk began selling billions worth of Tesla shares in early November, which includes paying a combined tax rate of more than 53 percent, according to CNBC. The decision was apparently the result of a Twitter poll conducted in November in which users voted to sell Musk 10 percent of his Tesla stake.
But observers said Musk would have to pay a large tax bill regardless of stock options that expire next year. And Musk could avoid higher tax rates introduced under the Democrat’s Build Back Better bill by choosing to use stock options now rather than wait until August 2022. Earlier this year, ProPublica reported that Musk paid zero federal income taxes in 2018 and paid only $455 million in taxes over the past four years, despite his wealth growing by $13.9 billion. Speaking at this year’s Code Conference, Musk said his taxes were zero in 2018 because he had overpaid the previous year.
Musk appears to justify his claim that he will pay “more taxes than any American in history” in 2021, but given that he has been reported by some as the richest person in the world, this should come as little surprise.