What’s behind Musk’s hefty tax bill?

It has to do with stock options. Lots and lots of stock options.

Visual: Singdhi Sokpo

What’s behind Musk’s hefty tax bill?

This year, me (Jacob) and Elon Musk will be paying a combined $11B+ in taxes.

Musk has a net worth of ~$243B, nearly all of it tied up in ownership of Tesla and SpaceX.

The reasoning for the hefty bill is as follows:

  • Musk is paid through stock options, which give him the right to buy Tesla shares at the price on the date of issue (in this case, back in 2012).
  • These options are set to expire next August, so Musk has started exercising them — at a tax rate of 40.8%.
  • Musk will also pay long-term 20% capital gains tax on other stock sales.

All told, it’s gonna be one hefty payment.

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Topics: Regulation

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