Elon Musk says he will pay over $11 billion in taxes this year, more than any American...

McMurdeR

Posts: 483   +609
I don’t worship Musk. I just don’t hate him. I don’t know him. There are far far more people out there who are more worthy of being hated than someone like Elon Musk. But I have little time for hating celebrities, its a waste of energy.

And I’m a dual national British American. I declare my income to the IRS every year but I currently in the UK for the next 6 months and then im going back to Alaska (who don’t charge me any tax at all). I believe in personal privacy His tax receipts are not a concern of mine or yours. Of course this headline is obviously part of a media stunt by Musk. He’s trying to win over people like you. But the fact is he could pay 1 trillion in tax and you still would be uttering expletives about the dude. The stupidest thing Musk has ever done has been to try to win over his haters.

I do however appreciate achievement and progress regardless of how much money the person doing it has made. You can dislike Musk all you want, you cant deny his achievements have been good for all of us. Most importantly however, humans always progress through private enterprise. If we shoot down our entrepreneurs everytime they are succesful and get rich we are only going to kill innovation. One day someone is going to create a fusion reactor and make significant progress against climate change and people like you will be hurling expletives at them for having the audacity to only pay $1bn in taxes..

It's one thing to be rewarded for your achievements, and quite another to possess so much wealth you couldn't possibly spend it without becoming a major or even definitive influence on your community. That's the issue here. There's nothing wrong with becoming wealthy, but it is a concern for society if too much of it's capital ends up in the hands of a small few. The risks should be too obvious to go into here..
 

Burty117

Posts: 4,459   +2,642
It sure is painful, but a lot of it is down to the misrepresentation of facts by the press and politicians who love a good headline.
First, not all billionaires are equal. Some inherited wealth, or acquired it through speculation, and many of these may have stashed this away in tax havens - I'm all for governments finding ways to tax the hell out of these.
But then you have the self-made billionaires who built their wealth through their innovation, drive and ability to execute. Their wealth is often tied up in the companies they built... like Tesla, and Amazon, and Facebook. And that wealth is constantly at risk... it is entirely possible that they would lose it all in a few months due to some other new innovation coming to the market... it has happened before and it will happen again.
To avoid selling too much of the company they built (so that they can retain control) they take loans using shares as collateral - but what nobody mentions is that if the share value goes down and the bank calls in the loans they will go bankrupt. Essentially they never own anything except their shares and their loans, and everything they have is constantly at risk.
Oh absolutely, the media dramatize it but I cannot feel bad for someone who has access to basically unlimited money (lets be fair here, if you have access to a billion+ dollars) and pays very little tax.

It's their choice to not sell shares and get loans, When the tax man asks me for money, he doesn't care what loans I have, what my rent is, they just see I earnt x amount of money and they want this percentage of it.

The rule shouldn't be different for billionaires. At the end of the day, they'll still be billionaires.
 

Thretosix

Posts: 155   +139
Good for him paying back all the tax paying dollars that made him rich. Doesn't make him any better a person, just paying taxes like the average American. Likely paying a lot lower percentage as well.
 

ScottSoapbox

Posts: 291   +518
The real solution to this is to repeal the income tax (for everyone) and go back to a small Federal government.

Put the spending power back in the people rather than politicians that can be easily bought by the rich.
 

BadThad

Posts: 995   +1,132
Most of the ultra rich barely pay their fair share of taxes. He's bragging because unlike a lot of other billionaires he's actually paying. The vast majority have the money to mostly avoid tax.

Please define "fair share"? What is an acceptable percentage of taxation that's "fair"?

How is it fair that in America ~40% of the population pays no taxes at all? They use all the government services everyone else does but somehow they have ZERO skin in the game. Make them pay, that's how I define "fair share", not going after the payers that cover MOST of the tax receipts to government.
 

BadThad

Posts: 995   +1,132
Oh absolutely, the media dramatize it but I cannot feel bad for someone who has access to basically unlimited money (lets be fair here, if you have access to a billion+ dollars) and pays very little tax.

It's their choice to not sell shares and get loans, When the tax man asks me for money, he doesn't care what loans I have, what my rent is, they just see I earnt x amount of money and they want this percentage of it.

The rule shouldn't be different for billionaires. At the end of the day, they'll still be billionaires.

There in only ONE tax code in America, it's no different for billionaires or the homeless.
 

BadThad

Posts: 995   +1,132
The real solution to this is to repeal the income tax (for everyone) and go back to a small Federal government.

Put the spending power back in the people rather than politicians that can be easily bought by the rich.

I'd like to see a federal sales tax and elimination of the IRS. No more cheating, tax attorneys, forms, etc. and EVERYONE pays their "fair share" based on what they buy. SIMPLE
 

BigRedPDX

Posts: 248   +175
He's not talking about his write offs and what he gets back. He makes a comfortable living. I don't really care what he pays in taxes.
 

bobc4012

Posts: 158   +67
Pocahontas going after musk for not paying taxes is peak irony.
Agree. When it comes to tax breaks and raises, you can be certain that Congress makes sure it takes care of itself first. Better than playing the lottery is to run for Congress and win. I can name at least one former Congress person whose children worked for foreign governments for big bucks and "contributed to the "family coffers". How many others have the same or similar deals going plus other shenanigans.
 

bobc4012

Posts: 158   +67
Well this is about 11 billion more than he has ever paid while making money off of corporate welfare so, good..
Obviously, you don't understand what is going on. You need to realize if you have a 401K, you may be or are benefitting indirectly from the same codes. If you own any stock, you can also borrow against it the way they do. Granted, it you may not be able to borrow enough to pay the grocery bill for a month, but it can be done. I did it in the past to get a better interest rate on car loans - used the stock I bought in the company's stock plan.

Also, taxing the market value of the stock one owns doesn't work too well either. People will sell their stock and find some other way of investing their money. I did that after moving to a state that did just that - taxed value changing investments as a personal property tax (housing is a slightly different matter, but I could argue a case against it and back strictly for an income tax on all money earner/gained, using what I would call a semi-flat tax - 3 to 5 levels all income earned/gained above certain level gets taxed at higher rate. However, the topic is too complex for further discussion on a board like this.
 

bobc4012

Posts: 158   +67
..... But yet he is still hated. The fact is at this point there is nothing good he can do to win people over. The people who hate him now will only ever be happy if they see him fail and that says more about them than it does about Musk. His achievements stand up on their own, they don’t need to be validated by the hate brigade.
They are the ignorant and stupid as they tend to love people like Warren Buffett, Bill Gates, etc. who do pretty much the same thing. In fact, I remember one election where Warren Buffett talked about doing the same thing and paid less taxes than someone making less than $100K. AFAIK, he is still probably not paying much in the way of taxes. Maybe I could start a charitable foundation, use some of the donations to cover my cost of living when I travel to talk about or do other "related" things so they can be written off as a "business" expense. Nothing illegal in that, but it is (or was) in the tax code and the more money involved, the bigger the advantage.

 

bobc4012

Posts: 158   +67
It sounds good but let's see him release his tax records so it can be verified .....
Can we all see your tax records? Please post them here so we can see if you paid your fair share - or are we just supposed to take your word for it?

Don't get me wrong, I am not advocating for Musk or any other wealthy person. But tax records are supposed to be private. If you want to see his, how about all the other billionaires' tax records? After all, Buffett said he does the same thing as it is in the tax code and he and Musk are not alone in doing it.
 

bobc4012

Posts: 158   +67
Does it included gains from Bitcoins related investment ???
Only if they are sold, and that depends upon where you live. Some states tax what you earn when you sell them, like a capital gains tax, but maybe at a higher rate. I don't know off-hand how the IRS treats them, but I would guess in a similar manner.
 

Burty117

Posts: 4,459   +2,642
There in only ONE tax code in America, it's no different for billionaires or the homeless.
Right, ok, then why did you say this:
How is it fair that in America ~40% of the population pays no taxes at all?
One Tax Code but apparently no one pays anyway?

Anyway, I clearly made my post about the UK, regardless, I have no idea what you're so upset about, its pretty common knowledge the rich don't get taxed as much as they should because they can afford to move money to places it can't be touched.

Same with big corporations, as an example, Star Bucks was paying a fraction of what they should, £167 million on profits, UK corporation tax is 19% but Star Bucks only paid 4.5 million (this was from 2018).
Please define "fair share"? What is an acceptable percentage of taxation that's "fair"?
That's what governments are for, unfortunately they also don't mind their rich friends getting away with not paying it.

I believe the logic is, don't scare away the rich as they will create more jobs for the lower classes, the trickle down effect. I'm fairly certain it doesn't work though, the vast majority of the rich don't want to part with their money regardless and it's gotten too extreme.

Probably why I don't mind Elon, he's a Billionaire that's using his money for something. In the UK there are 171 billionaires, with their wealth rising 21.7% during the pandemic to £597.2bn.

You hear about James Dyson, that's about it, the rest are silent and when you search for them, you never hear stories of them humble bragging about paying tax or normally anything positive at all.

I can't find the BBC article now but the jist was, if the top 23 billionaires in the UK paid their tax properly, it would have covered 90% of the costs the pandemic. Instead, they're now increasing the National Insurance for everyone.
 

Gabriel Pike

Posts: 286   +79
Obviously, you don't understand what is going on. You need to realize if you have a 401K, you may be or are benefitting indirectly from the same codes. If you own any stock, you can also borrow against it the way they do. Granted, it you may not be able to borrow enough to pay the grocery bill for a month, but it can be done. I did it in the past to get a better interest rate on car loans - used the stock I bought in the company's stock plan.

Also, taxing the market value of the stock one owns doesn't work too well either. People will sell their stock and find some other way of investing their money. I did that after moving to a state that did just that - taxed value changing investments as a personal property tax (housing is a slightly different matter, but I could argue a case against it and back strictly for an income tax on all money earner/gained, using what I would call a semi-flat tax - 3 to 5 levels all income earned/gained above certain level gets taxed at higher rate. However, the topic is too complex for further discussion on a board like this.
I believe I completely understand the problem but it is absolutely a ethical fallacy to think that because someone chooses to be compensated with stock that they should not be taxed on the value of that income. If I have to pay 30% income tax so should a billionaire also be taxed on their income even if they are not receiving cash as compensation and choose stock instead. I don't care if it is Bill Gates, Warren Buffet, or anyone else for that matter. This is a tax loophole that is putting the burden on the poor and middle class. I am glad he has to pay tax on something as he has not had to pay income taxes at all for the last several years and is currently the wealthiest person on the planet.
 

Wizriz

Posts: 12   +2
It's one thing to be rewarded for your achievements, and quite another to possess so much wealth you couldn't possibly spend it without becoming a major or even definitive influence on your community. That's the issue here. There's nothing wrong with becoming wealthy, but it is a concern for society if too much of it's capital ends up in the hands of a small few. The risks should be too obvious to go into here..
You can't spend wealth, you can only spend cash. Can you spend the value of your house?
 

Wizriz

Posts: 12   +2
Oh absolutely, the media dramatize it but I cannot feel bad for someone who has access to basically unlimited money (lets be fair here, if you have access to a billion+ dollars) and pays very little tax.

It's their choice to not sell shares and get loans, When the tax man asks me for money, he doesn't care what loans I have, what my rent is, they just see I earnt x amount of money and they want this percentage of it.

The rule shouldn't be different for billionaires. At the end of the day, they'll still be billionaires.
Of course it is their choice. But my point is the primary reason they try to avoid selling shares is to retain control over their company, and not to avoid tax. As long as they remain invested in their companies their wealth is permanently at risk, and it makes no sense to tax it as it may no longer be there tomorrow.
The rules for billionaires are exactly the same as for everyone else. The problem here is that you are trying to equate an increase in market value with "earnings". If the value of a billionaire's stock goes up by 1 Bn in a given year, they have earned nothing. The following year that stock might decrease in value back to where it was... so what does the tax man do then? Give the tax back?
Earnings only materialise when stocks are sold for cash, and it cannot be any other way otherwise we will all be paying taxes on increases in the values of our houses.
 
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Wizriz

Posts: 12   +2
I believe I completely understand the problem but it is absolutely a ethical fallacy to think that because someone chooses to be compensated with stock that they should not be taxed on the value of that income. If I have to pay 30% income tax so should a billionaire also be taxed on their income even if they are not receiving cash as compensation and choose stock instead.
Think you are missing the point here. The wealth comes from appreciation of the stock's value over time not from "compensation in stock". Any new stock awards are taxable as income, but increase in value of stock is not income. Just as if the market value of your house increases by 50K, that does not count as income.
 

Gabriel Pike

Posts: 286   +79
Think you are missing the point here. The wealth comes from appreciation of the stock's value over time not from "compensation in stock". Any new stock awards are taxable as income, but increase in value of stock is not income. Just as if the market value of your house increases by 50K, that does not count as income.
EDIT: I just realized on my drive into work that you made an argument supporting my case. You do in fact pay taxes on property and the gains that it has. I actually had an increase in property taxes this year on my house for this exact scenario. So then based on this and your statement above that is not accurate there should be taxes assessed ion those gains. It is called a tax adjustment when property tax increases due to the value increasing.

No sir, you are missing the point. His income is not a wage. He takes stock options to avoid paying taxes. So, then he, and everyone else that does this should be taxed on that gain or be forced to liquidate the gain to pay taxes on the income earned. You can't claim that there is not an income gained from accumulation of massive wealth. If you sell you house for a gain of 50K you pay taxes on that income(See also above). The problem is sitting on the wealth like a dragon sits on a hoard, while claiming that you have no actual money, when in fact there is a significant amount of money there.
 
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Wizriz

Posts: 12   +2
No sir, you are missing the point. His income is not a wage. He takes stock options to avoid paying taxes. So, then he, and everyone else that does this should be taxed on that gain or be forced to liquidate the gain to pay taxes on the income earned. You can't claim that there is not an income gained from accumulation of massive wealth. If you sell you house for a gain of 50K you pay taxes on that income. The problem is sitting on the wealth like a dragon sits on a hoard while claiming that you have no actual money when in fact there is a significant amount of money there. Also a house that gains 50K in value is quite different than billions in stocks and other tangible goods that can easily be liquidated.
You just said it yourself "if you sell a house for a gain you pay taxes on that income". It is exactly the same for shares. And no, large quantities of shares are not as liqiuid as you make out. Do you think Elon Musk or Jeff Bezos could just sell half their holding at today's share price? No way, the price would tank as soon as they started selling - as they would be giving up control over the company which would create a wave of panic selling.
Most billionaire entrepreuner wealth does not come from options, it comes from the shares that they already held when they first set up the company. Initially those shares would have been worth say $1 and they might have held say 1,000,000 of them. When that share price grows to $1000 they now own shares worth $1Bn. There is no income, there is only appreciation of market value - and it is all permanently at risk until the day they die.
The additional compensation in options you mention is not tax free. If someone has an option to buy stock worth $5,000 at $1,000 then they have already paid tax on the $1,000 that the need to exercise the option, and they pay capital gains tax on the difference in value I.e. $4,000.
 

Gabriel Pike

Posts: 286   +79
You just said it yourself "if you sell a house for a gain you pay taxes on that income". It is exactly the same for shares. And no, large quantities of shares are not as liqiuid as you make out. Do you think Elon Musk or Jeff Bezos could just sell half their holding at today's share price? No way, the price would tank as soon as they started selling - as they would be giving up control over the company which would create a wave of panic selling.
Most billionaire entrepreuner wealth does not come from options, it comes from the shares that they already held when they first set up the company. Initially those shares would have been worth say $1 and they might have held say 1,000,000 of them. When that share price grows to $1000 they now own shares worth $1Bn. There is no income, there is only appreciation of market value - and it is all permanently at risk until the day they die.
The additional compensation in options you mention is not tax free. If someone has an option to buy stock worth $5,000 at $1,000 then they have already paid tax on the $1,000 that the need to exercise the option, and they pay capital gains tax on the difference in value I.e. $4,000.
Please see my edit as you do in fact pay taxes on increased assesment of property. At this point no matter what you say will change my mind as to the need to tax billionaires that use stock as a tax haven.