Comment by ceejayoz
7 hours ago
Musk paid $11B in a year his wealth went up $86B on his way to likely being the first trillionaire. Are we supposed to cry about it?
The median net worth in the US is ~$200k. A lot of middle-class folks have likely paid more taxes in their lifetime than their entire net worth.
Nope. Just not post things like "billionaires pay no taxes."
They don't pay zero tax, for sure.
But they certainly get clever about techniques to keep it as low as possible, for shockingly low effective tax rates.
https://www.propublica.org/article/the-secret-irs-files-trov... has a whole bunch of examples.
I have some quibbles about the ProPublica definitions -- for instance market liquidity matters when calculating public company stock wealth -- and even if you're going to borrow against it, there are additional costs and pledges that must be made that significantly reduce the available capital.
The propublica number was like 4.5% or so if I recall, and does not count the taxes paid by the companies these people owned, nor does it imagine the financial benefits to say California teachers or firemen who co-own the companies through pension funds, nor does it reduce for effective wealth, nor does it reduce for unutilized wealth, e.g. if the stock price goes up and you don't sell or borrow against it, have you received benefit that makes sense to tax?
But if you net all those out and told me the effective rate was 12-15% on utilized capital, I wouldn't be surprised. I would be really surprised if it was $0 though.
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The only reason he paid $11B that year was because he exercised Tesla options. Many other years his tax bill has ranged from zero to millions.
What did he pay in previous years? To borrow a phrase, I’ll wait while you google it.