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https://www.cnbc.com/2021/11/16/taxes-arent-the-only-reason-elon-musk-is-selling-tesla-stock-.html https://www.cnbc.com/2021/11/16/taxes-arent-the-only-reason-.

https://www.cnbc.com/2021/11/16/taxes-arent-the-only-reason-elon-musk-is-selling-tesla-stock-.html https://www.cnbc.com/2021/11/16/taxes-arent-the-only-reason-... > Yet most of last week’s sales were for a different reason. Rather than selling as part of an options exercise, Musk started selling from his existing shares. Accountants said it would be impractical for Musk to use those existing shares to pay the tax on his options, since they carry a much higher tax bill. > Typically, executives sell the exercised shares immediately after they’re purchased to pay the taxes, in what’s known as a “cashless” exercise. Since the shares are sold immediately, there is no additional capital gains tax owed on the shares sold. > Because Musk’s sales beginning Nov. 9 were straight stock sales with little or no cost basis, he would owe long-term capital gains taxes of up to $1.3 billion. Using those proceeds to pay the options tax would amount to paying taxes twice — once on the capital gains and once on the options. > “It wouldn’t make sense from a tax perspective for him to use those proceeds for the options tax,” said Toby Johnston, partner in charge of the Silicon Valley office of Moss Adams, an accounting, consulting and wealth management firm. TL;DR: he seems to be selling more shares than needed strictly to pay taxes or to exercise option, and he selling in a tax-inefficient manner, therefore seemingly increasing his tax bill (any CPA on HN could opine better) Not sure if that quells the "billionaires should pay their fair dues" shouts that haunt him on every public discourse.

runnerup 5y ago
> Not sure if that quells the "billionaires should pay their fair dues" shouts that haunt him on every public discourse. Probably not. I think there are calls for 90% taxes on all earnings over $100 million or so. Even with a 90% tax, there's still plenty of incentive to continue earning/building. I think the argument is that a person can reasonably be individually responsible for $10-100 million of value, but past that isn't realistic. Any excess value captured by one person is almost certainly actually being created by either their employees or by public infrastructure. This 90% tax would really just be re-capturing that value by the entities which created the value (the taxpayers who work for the billionaire, and/or the government who built the infrastructure used). I mean, if you were paid $600/hr since Christopher Columbus sailed to America and saved every penny, you still wouldn't have a billion dollars. It's really, really hard to say anyone has worked hard enough or created enough value on their own to justify a billion. And a 90% tax over $100 million would still allow Bezos/Musk to have $30 billion each. Which is equivalent to a someone saving $1 million/year since the middle of the last ice age.
- defaultprimate 5y ago
  >This 90% tax would really just be re-capturing that value by the entities which created the value Man those folks should start a co-op, since they don't need their employers and are capable of creating value outside of them.
  - runnerup 5y ago
    This is a facetious retort and adds very, very little value. Maybe there's something else you can provide to further the discussion. I think your retort conflates "corporation" and "corporation owner / billionaire". Generally the intellectual property, capital, lobbying relationships and business relationships of the corporation are self-sustaining and do a good job of keeping competition at bay. That's axiomatic because if they didn't, the corporation would be succeeded by another which did. Surely you understand that sub-optimal systems can be self-perpetuating. The core issue isn't so much "Can employees create as much value outside of a corporation?" but rather "How much of that value was created by one particular employee / investor / owner?" > Man those corporations should really start their own countries, since their owners don't need to pay taxes to their nations and are capable of creating value outside of them.
    - defaultprimate 5y ago
      > That's tautologic It isn't and the fact that you assert it is proves my point very succinctly. You're attempting to establish an ideological framework that doesn't require empirical evidence and cannot be challenged logically, because you dismiss challenges to your logically fallacious assertions with zero supporting evidence as invalid because they do not coincide with your axiomatic assertions. What evidence do you have that better businesses exist and are failing to supplant sub optimal ones because of the reasons you indicate.
      - throwntoday 5y ago
        Surely if Tesla paid their fair share of taxes then Joe-shmo's EV startup would take off.
gamblor956 5y ago
Speaking as a tax attorney, when someone does something like this, it is motivated by liquidity concerns. Meaning, that the person has a lot of valuable assets but not in a form that can actually be spent, and they want cash they can actually spend on something. While most similarly situated individuals normally would take out a loan against their assets, in some situations that may be impractical or not possible. For example, the banks may be unwilling to make further loans if the individual already has a large amount of such loans (as Elon does), or if the underlying asset (Tesla stock) is viewed as overvalued (which many analysts have argued).
- ryzvonusef 5y ago
  If I may have a bit of your time, usually sales like this are pre-arranged. Billionaire goes to a Bank (like GS or whatever) tells them I need to sell X number of Shares by Y date on Z price, the Bank gathers up the buyers, and then the the transaction is committed in one fell swoop, on market down, GS takes their commission and it's over by the time the markets open next Monday What are the pros/cons of doing this bit by bit, over such a long period of time, on the public market? He is still not done and will be selling well into next week.

runnerup 5y ago

> Not sure if that quells the "billionaires should pay their fair dues" shouts that haunt him on every public discourse. Probably not. I think there are calls for 90% taxes on all earnings over $100 million or so. Even with a 90% tax, there's still plenty of incentive to continue earning/building. I think the argument is that a person can reasonably be individually responsible for $10-100 million of value, but past that isn't realistic. Any excess value captured by one person is almost certainly actually being created by either their employees or by public infrastructure. This 90% tax would really just be re-capturing that value by the entities which created the value (the taxpayers who work for the billionaire, and/or the government who built the infrastructure used). I mean, if you were paid $600/hr since Christopher Columbus sailed to America and saved every penny, you still wouldn't have a billion dollars. It's really, really hard to say anyone has worked hard enough or created enough value on their own to justify a billion. And a 90% tax over $100 million would still allow Bezos/Musk to have $30 billion each. Which is equivalent to a someone saving $1 million/year since the middle of the last ice age.

defaultprimate 5y ago
>This 90% tax would really just be re-capturing that value by the entities which created the value Man those folks should start a co-op, since they don't need their employers and are capable of creating value outside of them.
- runnerup 5y ago
  This is a facetious retort and adds very, very little value. Maybe there's something else you can provide to further the discussion. I think your retort conflates "corporation" and "corporation owner / billionaire". Generally the intellectual property, capital, lobbying relationships and business relationships of the corporation are self-sustaining and do a good job of keeping competition at bay. That's axiomatic because if they didn't, the corporation would be succeeded by another which did. Surely you understand that sub-optimal systems can be self-perpetuating. The core issue isn't so much "Can employees create as much value outside of a corporation?" but rather "How much of that value was created by one particular employee / investor / owner?" > Man those corporations should really start their own countries, since their owners don't need to pay taxes to their nations and are capable of creating value outside of them.
  - defaultprimate 5y ago
    > That's tautologic It isn't and the fact that you assert it is proves my point very succinctly. You're attempting to establish an ideological framework that doesn't require empirical evidence and cannot be challenged logically, because you dismiss challenges to your logically fallacious assertions with zero supporting evidence as invalid because they do not coincide with your axiomatic assertions. What evidence do you have that better businesses exist and are failing to supplant sub optimal ones because of the reasons you indicate.
    - throwntoday 5y ago
      Surely if Tesla paid their fair share of taxes then Joe-shmo's EV startup would take off.

gamblor956 5y ago

Speaking as a tax attorney, when someone does something like this, it is motivated by liquidity concerns. Meaning, that the person has a lot of valuable assets but not in a form that can actually be spent, and they want cash they can actually spend on something. While most similarly situated individuals normally would take out a loan against their assets, in some situations that may be impractical or not possible. For example, the banks may be unwilling to make further loans if the individual already has a large amount of such loans (as Elon does), or if the underlying asset (Tesla stock) is viewed as overvalued (which many analysts have argued).

ryzvonusef 5y ago
If I may have a bit of your time, usually sales like this are pre-arranged. Billionaire goes to a Bank (like GS or whatever) tells them I need to sell X number of Shares by Y date on Z price, the Bank gathers up the buyers, and then the the transaction is committed in one fell swoop, on market down, GS takes their commission and it's over by the time the markets open next Monday What are the pros/cons of doing this bit by bit, over such a long period of time, on the public market? He is still not done and will be selling well into next week.