Car stuff (public number: chedongxi)
Author | The Way
Edited | Mumi
According to foreign media reports, on February 14, Musk, who had just won the title of academician of the American College of Engineering, made a major act of kindness and donated 5 million shares of Tesla shares to charity. At present, there is no information on the charity that received Musk's donation.
This donation, everyone has mixed reviews, there are many doubts about Musk, some people suspect that Musk donated to reduce taxes.
It is reported that after Musk became the world's richest man, he has been called for donations by many people, and even targeted for paying the "rich man's tax". After this, Musk also sold Tesla shares several times, which was suspected of cashing out, triggering stock market turmoil.
First, whether donating shares to the foundation is for charity or tax avoidance
On Valentine's Day, February 14, 2022, it was reported that Tesla CEO Elon Musk donated more than 5 million shares of Tesla stock to an anonymous charity, details from SEC documents. The document does not provide information on the recipient institutions, only indicating that Musk donated a total of 5.044 million shares of Tesla stock, worth about $4.6 billion (about 29.1 billion yuan) at the current stock price, and that the donation was completed on November 19, 2021, when the stock was worth nearly $6 billion (about 43.7 billion yuan).
But some suspect that Musk donated shares to avoid taxes. Because Musk has said that because the stock options he exercises expire in 2021, he will need to pay more than $11 billion (69.7 billion yuan) in taxes. Analysts at the time said Musk might give away Tesla stock, which would get tax breaks because stock donated to the charity would not be subject to the profits tax deducted at the time of sale.
Bob Lorde, an associate researcher who studies tax policy, said musk's tax benefits from donating stocks were so large that he could save 40 to 50 percent of the $5.7 billion (about 36.1 billion yuan) in taxes, depending on whether the tax on donation relief could be deducted from his California taxes and whether he could get a break in the profits tax he had to pay to sell his shares.
Screenshot of Musk donating stock
Second, it has been called to donate to end hunger Voting to donate
After becoming the world's richest man last year, Musk was called upon by officials from the United Nations World Food Programme (WFP) to donate money to help solve the world's hunger problem. Musk then replied on Twitter, "If WFP can accurately state how $6 billion (about 38 billion yuan) will solve the problem of world hunger, I will immediately sell Tesla stock and help solve it." ”
Subsequently, the World Food Programme did develop a plan, but Musk did not respond. After that, Musk launched a vote on Twitter, asking netizens to help him decide whether to sell 10% of Tesla's stock, and he will eventually follow the voting results. Obviously, most people want Musk to sell the stock, but whether selling the stock was Musk's intention or not, we can't know. It is known that Musk and his brother then sold some of the shares to cash out, and Tesla's stock price fell by more than 5.3%.
Screenshot of a tweet where WTP officials appeal to Musk for donations
Third, the taxation of the rich is resentful of selling stocks to cash out but owed taxes
After Musk sold billions of dollars in stock, U.S. Senator Bernie Sanders, who supports a "rich tax," tweeted, "We have to demand that extremely wealthy people pay fair taxes." There is no room for discussion. ", seems to be aimed at Musk. Musk immediately shrugged back, asking if he wanted him to sell more stock (get richer), and the next day Musk criticized bernie for being a taker rather than a creator.
After that, Musk continued to sell stocks. Judging from the regulatory documents disclosed, Musk has launched stock cash-out in September last year, with a total cash-out amount of about $6.9 billion (about 43.7 billion yuan). The filing also shows that Musk still indirectly holds more than 166 million shares worth more than $170 billion (about 1,076.9 billion yuan). At this point, it is still a lot away from what Musk said about "selling 10%", and it is necessary to sell about 10 million more shares.
However, Musk still needs to meet the tax obligations associated with exercising stock options. He may also be required to pay state income tax to California, which has a top tax rate of 13.3 percent, according to foreign media reports. Although he has moved to Texas, which doesn't pay state income tax, he acknowledged on Twitter that he is subject to California's state income tax because he still works in the state for a long time.
▲ Musk's Twitter screenshot of Bernie's reply
Conclusion: Musk donates stock, or achieves a win-win situation for charity and tax breaks
Although Musk's donation of stocks is very suspected of tax avoidance, he still made good deeds and won everyone's favor. What the truth is, it requires the patience of the people. Combined with the example that the Musk Foundation allocated nearly $5 million (about 31.78 million yuan) to the Brownsville Independent School District last year, I believe that Musk will continue to do good deeds. And the partial tax reduction is, in some ways, also an encouragement for the rich to do charity.