Elon Musk says that he is prepared to sell about $24 billion worth of Tesla (TSLA) stocks if his Twitter followers vote for it.
He says that it is to address the accusation that he is not paying taxes.
Lately, there has been a lot of talk about some of the richest people in the world not paying taxes.
Many of the world’s richest people have most of their wealth tied to stocks.
While their net worth is reported in the billions of dollars and can fluctuate by billions of dollars every month, that value is not liquid unless they were to sell those stocks – otherwise known as unrealized gains.
Currently, our tax code and financial system are built around the notion that you haven’t made any money until you sell those stocks and realize the gains.
This results in billionaires sometimes seeing their net worth increase by billions of dollars in a year and yet not having to pay any taxes that year.
But now there are some controversial talks about taxing those unrealized gains.
Now that Elon Musk is the world’s richest man by a wide margin thanks to the rise in Tesla’s stock price, he has been at the center of some of those talks.
Tesla’s CEO has argued against taxing those unrealized gains, but he has now taken to Twitter to offer an alternative.
He says that if Twitter votes for it, he will sell 10% of his stake in Tesla, which is going to have to pay taxes on:
The CEO says that he will do whatever the results of the Twitter poll.
As of the time of writing, over half a million people voted on the poll and ‘Yes’ is winning by a significant margin:
Currently, 10% of Musk’s stake in Tesla is worth around $24 billion, which he is going to have to pay taxes on.
If Musk was to sell that many Tesla stocks, it would likely have a significant negative impact on the price.
Well, I can’t help but be a little skeptical about the timing of this move.
It is being framed as “oh yeah, you say I don’t pay taxes? Well, here you go!”, but at the same time, Musk had a ton of Tesla stock options that are due to be exercised this quarter.
We anticipated that he would have to sell some stocks in order to cover his tax obligations over these stock options.
When new stocks are issued to someone, it is recognized as compensation and taxes are due on them in most jurisdictions.
It is certainly a strange coincidence that he would float an idea like this around the same time.
On another note, it is also very indicative of how important Twitter is in Musk’s communications and interactions.
He already uses the platform a lot to communicate and now he even lets Twitter followers decide whether or not he is going to sell Tesla shares.
That’s a lot of power to give to a platform that is not without fault. It’s wild.
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