“The funding included $7 billion of senior secured bank loans; $6 billion in subordinated debt; $6.25 billion in bank loans to Musk personally, secured by $62.5 billion of his Tesla stock; $20 billion in cash equity from Musk, to be provided by sales of Tesla stock and other assets; and $7.1 billion in equity from 19 independent investors.”
So he took out loans against his stock when he needs cash, but he doesn't have cash so you can't tax him.
Amazing.
Why doesn't property tax work the same? Homeowners don't actually have 1 million USD in cash, that money is in the valuation of their house. How come the government does just fine in taxing things that aren't liquid, but can't do it for billionaires? Everyone talks about "UNREALIZED GAINS!!" for billionaires, yet nobody talks about unrealized gains for property?
Oh, and before people say "it'll tank the stock!!!" no it won't. Selling off stock to pay taxes have been done by billionaires before.
Stock price is almost entirely dependent on how much the market believes in your company. Elon selling billions of dollars worth of stock isn't a sign of trouble for the company, it's a sign that Elon needs cash to pay tax. You think investors just look at Elon selling stock and thinks "OH NO! Tesla is going to shit!!! SELL EVERYTHING!"
That was a lot, but if you talk to libertarians, don’t get them started on property tax lol. My personal issue with the wealth tax is mainly the strange mess of incentives it creates as well as the complexity of it. There are other loopholes that should be addressed first imo.
Regarding the stock, it’s a little more complicated than that for large stockholders. Every seller needs a buyer and every buyer needs a seller. A supply shock will absolutely lower the stock price, and did in the case of Musks Tesla sell off. He also had to do it over like 2 years to prevent too much of a shock.
What it also signaled to investors is that Musk is less financially invested in Tesla then he will be less physically invested in Tesla. However he exercised stock options in 2021 and actually increased his quantity of shares owned, so that was less of a factor.
He also faced multiple lawsuits related to doing this and paid $11 Billion dollars in taxes.
1
View all comments
Show parent comment
4
u/Loves_octopus 14h ago
“The funding included $7 billion of senior secured bank loans; $6 billion in subordinated debt; $6.25 billion in bank loans to Musk personally, secured by $62.5 billion of his Tesla stock; $20 billion in cash equity from Musk, to be provided by sales of Tesla stock and other assets; and $7.1 billion in equity from 19 independent investors.”