Twitter poll saves Tesla boss Elon Musk $3.5 billion in tax

There is speculation that Elon Musk may have been planning to sell some of his Tesla shares as far back as September. (Source: AP) (ASSOCIATED PRESS)

Tesla CEO Elon Musk’s recent Twitter poll asking his followers whether he should sell 10 per cent of his shares may have raised eyebrows - and temporarily lowered the share price - but there may have been a method to the madness.

One of the biggest concerns poll respondents commented on was how Musk's planned sell-off would impact Tesla’s share price.

And true to speculation, the share price fell by 4.84 per cent, wiping around US$60 billion ($80.8 billion) from the company’s value within hours of trade opening following the poll.

It was during this lull in trading that Musk sold US$5 billion ($6.9 billion) in shares. And even though he sold them so that he would be eligible to pay tax in the US, he actually saved US$2.6 billion in taxes because he sold when the market was at a low.

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There is now speculation Musk had planned to sell the shares as fair back as September, which would render the November Twitter poll a side-show.

Tesla shares fell by 4.84 per cent - US$60 billion - following Musk's Twitter poll. (Source: AP) (ASSOCIATED PRESS)

Twitter poll said yes

Musk took to Twitter last week to ask his 62.8 million followers whether he should sell 10 per cent of his Tesla stock so that he would be eligible to pay taxes. Musk does not take home a cash salary, only stock, of which he owns 193.3 million shares, which represents 20.7 per cent of the company. He is believed to be worth US$318.4 billion.

Out of 3,519,252 people who voted in Musk’s poll, a clear majority of 57.9 per cent called for him to sell the shares. Musk later said he would “abide” by the results.

That stock is worth about $28.14 billion.

Musk will need to sell another US$21 billion in shares to meet his pledge in full.

Biden plans to tax billionaires

Debate in the United States has been heating up recently amid revelations about how millionaires and billionaires avoid paying tax, while millions of Americans struggle to earn a living wage.

In the US, the Democrats are increasing pressure on billionaires to pay appropriate taxes in light of increasing media attention on the ways they dodge paying.

The Biden Administration wants billionaires to stop hiding their wealth and start paying taxes. (Source: AP) (ASSOCIATED PRESS)

The proposed new law would tax tradable assets like shares and property to help pay for the Biden administration’s social and climate policies.

Musk has been a vocal critic of the Democrats' plan, and urged Americans to protest against the proposed bill, tweeting: “Eventually they run out of other people’s money, and then they come for you."

Tesla was recently valued at above US$1 trillion for the first time just last month. On Friday, Tesla’s shares closed at US$1,033.42 each.

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