After the “removal” of Donald Trump, Elon Musk is the biggest entertainer on Twitter. He knows how to draw attention to himself, and it proves even his last bit of it in the poll he asked 67 million followers: Should I sell ten percent of my shares in Tesla?
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I call it a lot of fun on the weekend night. Where is the vote about who will drop out in StarDance. Especially when celebrities are missing there.
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Elon Musk’s money was voted on by 3.5 million users and a slight majority said “yes”. This means that if he keeps his promise, Musk will sell about 17 million shares, which is about $ 19.8 billion at the time of writing. It will reduce its stake in the company it manages to about 15.5 percent.
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But what does it really mean? Does Elon Musk want the money so that he can eventually pay tax on unrealized profits, which are still only speculated about? Or did he use it as an opportunity to monetize a portion of Tesla’s stock, which most analysts say are highly overvalued?
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Or do they just enjoy our astonishment, embarrassment and insecurity? As many times before?
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But be careful not to be completely fooled. They are not such a joke and fun.
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With an estimated assets of around $ 330 billion, Elon Musk is the richest man in the world, even ahead of Jeff Bezos. But we must remember what we know, even if we sometimes forget it: Most of the money of the richest people in the world exists only “on paper”.
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They are nowhere in the bank or in the cupboard, but in the form of shares or stakes in a company owned by billionaires. Of course, the creators include them in their personal assets, which is why we read that when stocks go up (as has happened at Tesla in the last three months, when they jumped 75 percent), they “got rich” or “lost weight”.
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However, in the accounts, there is no income and therefore no taxes are paid on them. This can lead to the personal taxes of the world’s richest people often being low or zero. For example, Elon Musk as an individual paid zero dollars in income taxes in 2018.
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It is a political – and to a large extent philosophical – question of how to look at this fact and whether to do anything about it. It can be quite disturbing for a bus driver or a supermarket saleswoman (and the author of this text) to read that they paid more from their modest income than the richest man on the planet.
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On the other hand, it is clear to everyone that Elon Musk indirectly “delivered” a huge amount of money to various public coffers (whether US federal or state, or any other state where global Tesla operates). He is not a black passenger of economic growth, on the contrary, he personally co-creates tremendous values that help realize this growth.
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It is easy for politicians to ask: ‘tax billionaires’, especially for populist politicians and especially at a time when anti-pandemic measures have emptied the public treasury. Here are the roots of the American Democrats’ proposal to tax some of the “unrealized profits,” that is, the paper income mentioned by stock movements.
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Specifically, Elon Musk is involved in the stock taxation he acquired in 2012, with a current value of about $ 30 billion. The tax could be around ten billion dollars.
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The idea of a billionaire breaking a piggy bank and sending money to the state (just as the rest of us do every spring) is, of course, extremely pleasant and attractive. It evokes the illusion of a kind of higher justice and the fact that we are all equal. But it is really an illusion, both: there is no general justice and we are not equal.
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Taxes are calculated according to arithmetic formulas, but that is the end of their exactness. They are not a general principle or a natural law. Taxes are a human construct, imperfect, and therefore illogical. We can perfectly logically justify why some kind of tax should exist (whether real estate or billionaire), but we would also logically explain why the same tax is meaningless. It is only a matter of opinion, attitude and optics.
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This is also the reason why the tax systems of even the most advanced and economically functioning countries are often so inconsistent and confusing. Yes, the free market makes the rich rich and the poor poor. This is not proof that capitalism does not work, quite the contrary. That’s how it’s supposed to work. As controversial Canadian academic Jordan Peterson says in one lecture: When you play Monopoly at home tonight, the game ends when the winner has everything and the others have nothing. That is capitalism.
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That’s how it works, and we know that the opposite – trying to make sure everyone does the same – doesn’t work at all. The task of modern civilization is to ensure that we never finish those Monopolies in the real world. And taxes serve this as an imperfect means. Illogically, often chaotically, we redistribute money in society and rely on it to somehow “work out”.
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And while that doesn’t work out right now, as in the United States right now, where the Biden administration will be short of $ 1.85 trillion for social spending and the fight against climate change, the tax system needs to be “messed up.” Again – let’s not look for logic in that. In such a case, it is not taken where it is fair or right, but where some money can be taken.
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Billionaires are a clear goal. Especially since Monopoly has been doing very well in recent years. Never before has property been distributed in society so asymmetrically. One percent of the richest own 40 percent of the world’s wealth, economists have calculated. This is Pareto’s “steroid” rule, to put it bluntly.
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But are we talking about the real world, or rather those theoretical Monopolies with paper money on the table in the living room? The honest answer is that it is “somewhere in between”. In the real world, there are basically no billions of dollars, however we still read about that amount. And however we know that while Elon Musk “owns” $ 330 billion, Jeff Bezos is second with $ 220 billion.
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Um, really? By the way, a billion dollars is the amount at which the human imagination fails. We know the comparison between a million and a billion: While a million seconds is about 12 days, a billion seconds is 31 years.
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I have one more example: If a hypothetical sailor from Christopher Columbus’ ship, who had settled in America in 1492, had made (!) A million dollars every day (in today’s money), he would still not have as much as the estimated fortune of Jeff Bezos in 2021. . To reach it, he would have to earn another 71 years.
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In other words, we are talking about amounts that make no sense. Which cannot be earned or spent, and which cannot therefore be taxed. Which do not actually exist. The rankings of the richest people do not really measure their wealth, but their influence. They have nothing to do with how rich the people in question are, in the sense that the rest of us understand it.
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Perhaps it would make more sense – following the example of paper shares – to call their assets “unrealized wealth”. Elon Musk is a good example of this. Yes, he travels on private planes, probably does not carry cash and does not pay his mortgage. But his property is just a number. After all, he recently theatrically got rid of all his real estate and claims that he does not physically want to own anything at all.
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The principle of the tax is that you take the money somewhere and move it somewhere else. Best where there is more need for the company to work at the moment. Or so you think. But in the case of influence, it simply cannot be done. It can be removed, but not relocated. Elon Musk has influence, not money. The ten billion dollars they may pay as a tax are purely symbolic. Drop in the sea. He will not be impoverished and the US Treasury will not get rich.
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Even the role of Elon Musk in this game is only symbolic. But it is interesting and amusing that he became the main actor. After all, he is one of those who are looking for solutions to the problems of today’s world. It could be electromobility fighting climate change or conquering space, where humanity could expand from a crowded planet in the future.
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And the question is simple: Do we believe that Elon Musk (and with him other bosses of technology and other large companies) know what our future should look like? Or will it be better than in the past to just stir the paper money on the table? But – and this is an even more important question – will it be enough? Will we still play Monopoly after 2021?
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We are in a delicate situation, which has been highlighted by a pandemic in the last 18 months. The world has changed dramatically in the last 30 years. The taxation of Elon Musk’s stock options is a cosmetic matter, but it can have far-reaching symbolic significance. Because today’s debate on social media, climate change and the richest people in the world is nothing less than a referendum on whether we want to continue living in the world and moving into the future determined by the technological revolution after 1990.
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Part of this is the question of whether Elon Musk et al. our potential rescue or danger. Whether he is a brilliant visionary or just a naughty child. I find it quite unfortunate that his clowning on Twitter so far suggests the latter.
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