Tesla’s Elon Musk was interviewed by Kara Swisher at CodeCon 2021 today. He talked about a variety of issues there, including Tesla, taxes and stock options, Tesla’s stock price, his tweets, the SEC, and more. The full interview is below, and I’m going to touch upon a few things he talked about and share some thoughts.
Taxes & Government Contracts
One of the criticisms, Swisher pointed out nearly 37 minutes into the conversation, is that Elon doesn’t pay enough taxes. She asked him to address this.
“There was a bunch of very misleading stuff that was published by ProPublica and really that was some sort of trickery and they’ve done themselves no good service by doing that. First of all, with respect to the government contracts that SpaceX wins, our aspiration is to do the most for the least. And if you look at all the contracts we’ve won, we’ve won them because we had the best price. We have a better service at a lower price. They weren’t just handed to us.”
He used the Lunar Lander as an example and explained that compared to competitors such as Lockheed Martin and Blue Origin, SpaceX’s bid was half as high.
“We saved taxpayers like $3 billion relative to that contract. So I think that’s a good thing.”
They then moved into personal income versus wealth taxes.
“With respect to my personal taxes, I don’t actually draw a salary or anything. My cash compensation is basically zero.”
Swisher subtly points out that most people have to make income in order to survive, and they then thus have to pay taxes on that income. Referencing the story this topic came from, she was emphasizing that the super wealthy don’t need to make income and thus don’t have to pay taxes. The key here is the difference between income and wealth, and the wealthy getting an unfair advantage in society.
“I do have stock options that vest.
“With Tesla and SpaceX, I have not really bothered to sort of take money off of the table, which is a common — most people do. They sell some of the stock; they take money off the table.”
He was the first in and he will be the last out (of the stock of those companies). In other words, he’s not selling his stocks — especially to appease those who believe that he should sell it and give it away to the government. And, honestly, he shouldn’t have to sell any investment in his companies to please the government or those thinking that he is a bad person because of his net worth on paper — which fluctuates with the value of the stocks he owns.
He explained that the success of his companies wasn’t assured and touched upon the struggles over the years that the companies have gone through, and he’s held the stock through it all. In 2018, it looked like Tesla wasn’t going to make it. He could have sold stock and been rich forever regardless. He didn’t. And, thankfully, the company survived anyway. That aside, he doesn’t plan to take any money off of the table.
“And now this is trying to be turned around and made into a bad thing. This is messed up.”
There will come a point in time when his stock options expire and he explained that, then, his tax rate is about 53%. That’s not exactly a low tax rate and he pointed out that it will increase next year.
“I have a bunch of options that are expiring early next year so that huge block of options will sell in Q4 — I’ll have to or they’ll expire. And my top marginal tax rate is 53%.”
There was a Q&A towards the end and one of the questions was, “We’re living in this in-between time — between we drive our cars ourselves and the cars drive themselves. They’re semi-autonomous. For those of us in the industry, those of us who understand something about technology, about machine learning — actually like it, it’s pretty easy. It fixes my mistakes. I fix its mistakes. A lot in the press though about — and Google’s position certainly — is that this is like the worst place to be, right? Because people are going to get checked out and the cars are going to drive themselves. … What do you think about the ML-human hybrids that we’re kind of embracing right now. How long are we going to have these crossover periods? I know you believe FSD is around the corner. Do you think that this is a problem? Are we going to teach people to deal with ML?”
“The transition period to new technology is always a little bumpy, but I think — we published the safety stats, like basically miles driven on Autopilot and miles driven manually, and basically — it’s an order of magnitude difference.”
He noted that for those who accuse Tesla of either making up the statistics or playing with them, Tesla is just putting the information out there and it speaks for itself. The difference between miles driven on Autopilot and miles driven manually is very significant.
There’s a lot more covered in the video and you can watch it here.