Responding to political attacks on his wealth and taxes, Elon Musk said his wealth “is not some deep mystery” and that his taxes are so simple, he could do them himself “in a few hours.”
In an interview with The Babylon Bee, a conservative satire site, the world’s richest man said his wealth of more than $245 billion is fully transparent and isn’t stashed in any offshore accounts or special tax vehicles to lower his obligations.
Earlier this month, Sen. Elizabeth Warren tweeted that Musk was “freeloading off everyone else,” since he didn’t pay federal income taxes in 2018.
“I don’t have any offshore accounts, no tax shelters,” Musk said. When asked if H&R Block could do his taxes, he responded: “H&R Block could easily do my taxes. I don’t need H&R Block, I could do it. It would take a few hours. My taxes are very basic.”
Musk is expected to pay what is likely to be the largest single individual tax bill in U.S. history, with federal and California income taxes estimated to top $11 billion. He is required to pay the tax in order to receive compensation of more than $23 billion, paid in the form of stock options that would otherwise expire in August 2022.
In November, Musk polled his Twitter followers asking if he should sell 10% of his stake in Tesla. After his followers voted in favor of selling, Musk said he sold the 10%.
“I sold enough stock to get to around 10%, plus the option exercise stuff,” he said in the interview.
The latest filings with the Securities and Exchange Commission show Musk still has at least 3 million more shares to sell to reach his 10% target of 17 million shares. He also still has nearly 4 million more stock options to exercise by August, which suggests there are either more filings to come, or he will sell or exercise more stock in the coming months.
Musk admitted that the requirement to pay his taxes on the compensation package was “part of the reason” for selling this quarter. He created a scheduled selling plan for the tax-related shares in September, well before the Twitter poll. He said that “over and above that” he sold shares to get to the 10% threshold.
Musk said that his large wealth and low taxes are both products of simple math — his wealth comes from his ownership stakes in Tesla and Space-X, which he said were “massively painful and difficult to build.”
He doesn’t take a salary or cash bonus, and he hasn’t sold a large number of shares in the company until this year. Since taxpayers only pay taxes on income or stock once it’s sold, Musk said he didn’t pay large taxes every year.
“It’s important to understand, what is this wealth?” Musk said. “It’s not like I have some massive cash balances. My cash balances are very, very low, and at least until I sold stock. … Really the first time I sold stock in any meaningful way was this quarter.”
He said the one year he didn’t pay taxes — 2018 — was because he had “accidentally” overpaid in 2017 and had a credit for 2018. Yet the criticism of his tax payments, he said, led him to sell even more stock than required by his options exercise.
“I said ‘should I sell?’ What am I supposed to do? Do I send shares to the government? Unless I sell shares there is no actual mechanism to pay tax. So I said ‘should I sell 10% in order to pay tax?’ I asked Twitter and on balance they said yes.”
He said that even today, his fortunes are tied almost entirely to Tesla and Space-X. “If Tesla went bankrupt, I would go bankrupt too, immediately.”