Elon Musk’s net worth grew by $ 14 billion from 2014 to 2018, but he paid just $ 455 million in taxes, according to a new report
- From 2014 to 2018, Elon Musk paid $ 455 million in taxes on $ 1.52 billion in income, according to a report by ProPublica.
- However, according to the report, his net worth rose by $ 14 billion over the same period.
- Musk’s net profits come mostly from his massive stakes in SpaceX and Tesla, but stock awards are not taxable.
Elon Musk, CEO of Tesla and SpaceX, is one of several mega-wealthy citizens who pay a small amount of income tax compared to the amount their fortunes soar every year, according to a report published Tuesday by nonprofit news site ProPublica.
Between 2014 and 2018 – when Musk’s net worth grew by $ 13.9 billion – he reported only $ 1.52 billion in taxable income to the Internal Revenue Service, ProPublica reported. When his $ 455 million in taxes paid is compared to his capital gains, it equates to what ProPublica calls a “true tax rate” of 3.27%. This “true tax rate” is less than a tenth of the 37% Musk would have to pay if his assets were considered income. However, Musk’s net profits come mostly from its massive stakes in SpaceX and Tesla, which is now the world’s most valuable automaker. Musk receives a large amount of stock bonuses from Tesla in compensation, but under current federal tax law, he does not have to pay taxes until those assets are sold or capital gains are otherwise realized. In 2018, Musk paid no federal income tax, the report said.
The idea that high net worth individuals use the tax code to their advantage to pay a minimal income tax is not new. But ProPublica’s coverage, based on the Internal Revenue Service’s more than 15 years of data on thousands of the country’s richest people, sheds light on how much Musk and others pay in taxes each year – and how much income they actually report.
ProPublica has neither published its source data nor disclosed how the information was obtained. Musk didn’t respond to questions from ProPublica and only responded with a “?”, The site reported.
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The treasure trove of information shows the investments, stock trades, incomes, and other key data points about the fortunes of billionaires like Mark Zuckerberg, Bill Gates, and Rupert Murdoch. ProPublica compared the amount these billionaires paid in federal income taxes to the amount their net worth grew over a period of time to develop their “true tax rate”. In reality, taxes are paid based on earned income, which does not include stock bonuses or the appreciation of investments.