The world's richest man (or second richest, depending on who you ask) has used a Twitter poll to decide whether or not he should pay tax. Elon Musk, currently going under the Twitter handle "Lorde Edge", took to Twitter on Saturday to ask his followers if he should sell Tesla stock so that he could "personally" pay tax.
The SpaceX CEO, estimated to be worth over $300 billion, promised that he would abide by the results of his poll, whatever the outcome.
"Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock," Elon, whose worth jumped $36 billion in a single day last month, wrote on Twitter. "Do you support this?"
The final results showed that 58 percent were in favor of the move, with 42 percent against it. Musk – who paid $0 in federal income tax in 2018, according to an analysis by ProPublica – has since indicated he is still prepared to go with the poll outcome. Tesla’s Frankfurt-listed shares fell about 3 percent following the results of the poll, according to Reuters.
Musk notes that "I do not take a cash salary or bonus from anywhere. I only have stock, thus the only way for me to pay taxes personally is to sell stock." Though some on social media have praised him for being willing to sell off stock in order to pay more taxes, others – including US Senator Ron Wyden – are of the opinion that Twitter polls shouldn't play any part of the tax system.
"Whether or not the world’s wealthiest man pays any taxes at all shouldn’t depend on the results of a Twitter poll," Wyden wrote. "It’s time for the Billionaires Income Tax."
"Why does ur pp look like u just came?" Elon Musk responded.
The "Billionaires tax" would see taxpayers in the US with assets worth more than $1 billion have their stocks and other assets valued annually, regardless of whether they have sold the assets or not, and taxed accordingly. Currently, the owners of these assets are only taxed when the assets are sold and profit booked. Stocks and assets that remain unsold but raise in value are known as "unrealized gains", and it is this which will be taxed if the Billionaires tax goes through.
Each year, Mr. Bezos makes a salary of around $80,000 and over the period 2010-2018, for example, his unrealized (or accrued) capital gains from his Amazon stock holdings were over $10 billion a year on average.
"Currently, under this simplified example, if Mr. Bezos does not sell any of his Amazon shares in a given year, the income tax ignores the $10 billion gain, and effectively he is taxed like a middle-class person making $80,000 a year," Director of Federal Tax Policy at the Center on Budget and Policy Priorities and proponent of the tax explained on Twitter.
"This happens because the tax code currently only treats as income capital gains that have been 'realized' – when an asset is sold – and does not treat “unrealized” gains as income. Proponents of a Billionaires tax, like me, are saying it does not make sense to tax Jeff Bezos like he was a middle-class person with $80,000 of income."
Until that loophole is closed, maybe Twitter polls will fill the gap.