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Elon Musk pledges to sell Tesla stock if Twitter voters agree

Elon Musk on Saturday said he would sell 10% of his stockholdings in Tesla Inc. if the move won backing in a Twitter poll, reinjecting himself into the debate over how some of the wealthiest Americans should be taxed.

“Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock,” the Tesla chief executive said on Twitter, adding, “I will abide by the results of this poll, whichever way it goes.”

Mr. Musk, considered the world’s richest person after a surge in the value of his Tesla stock, previously blasted a proposed tax on billionaires that would have subjected some holdings of about 700 Americans to annual capital-gains taxes on increases in value.

“Eventually, they run out of other people’s money and then they come for you,” Mr. Musk wrote on Twitter last month.

The plan would have taxed the billionaires’ unrealized gains on publicly traded assets, so they would have owed tax annually on rising values whether the assets were sold or not. (Losses would have offset gains.) This change would have effectively eliminated the billionaires’ ability to defer capital-gains taxes indefinitely.

The proposed tax drew strong opposition and was dropped soon after it was proposed in late October. Opponents feared that the tax could be broadened to apply to assets of less-wealthy taxpayers, among other things.

Mr. Musk’s poll drew a response Saturday from Senate Finance Committee Chairman Ron Wyden. “Whether or not the world’s wealthiest man pays any taxes at all shouldn’t depend on the results of a Twitter poll,” the Democrat from Oregon said in a statement in which the lawmaker voiced support for a tax on the income of billionaires.

Regardless, if Mr. Musk is inclined to sell stock, now could be a good time to do it. The current top tax rate on long-term capital gains is 23.8%, but Congress has been considering raising it. Changes in capital-gains tax rates often take effect immediately, to prevent gamesmanship.

Mr. Musk holds more than 17% of Tesla stock, valued at over $200 billion, according to the most recent available data in FactSet. Mr. Musk, who also runs the privately held rocket company Space Exploration Technologies Corp., or SpaceX, has a total net worth of around $338 billion, according to the Bloomberg Billionaires Index.

A Tesla share sale could amount to around $21 billion based on the stock’s Friday closing price of $1,222.09. The Twitter poll is scheduled to close Sunday afternoon.

Mr. Musk accepts no salary at Tesla. In a tweet Saturday he said “the only way for me to pay taxes personally is to sell stock.” Shares have risen about 75% over the past three months.

His compensation package entitles him to stock awards. He typically doesn’t sell stock, though he has sold some to cover taxes on past stock options.

Selling shares would weaken Mr. Musk’s control over Tesla. Unlike Meta Platforms Inc. (formerly Facebook Inc.) and Google parent Alphabet Inc., Tesla lacks a dual-class of stock ownership, which gives founders supervoting power over common shareholders.

Mr. Musk has some personal loan obligations pledged against his Tesla stock, according to a company regulatory filing.

Mr. Musk in September said he “would prefer to stay out of politics” after Texas Gov. Greg Abbott, a Republican, said the billionaire supported his social policies. 

Mr. Musk, who has since said he would move Tesla’s corporate headquarters to Texas from California, has become increasingly critical of the Biden administration, after Tesla wasn’t invited to a White House event aimed at accelerating the adoption of electric vehicles.

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