Tesla CEO Elon Musk may be further ramping up his very busy life, as he is reportedly on the verge of a move out of California.
Why the rumored new home near Austin, Texas? There are millions and millions of reasons (tax dollars) to consider.
Musk, with a net worth of $139 billion, holds a majority of that money in his company’s stock. Tesla shares are up more than 1,000% since July 2019, and Musk would soon be on the hook for California’s highest-in-the-U.S. capital gains tax rate, 13.3%.
Musk has been comparing California to a championship sports team that’s become complacent and developed a “winning-for-too-long problem.”
He also expressed frustration with California Gov. Gavin Newsom and other lawmakers earlier this year over pandemic restrictions and said he had put his California houses on the market.
Texas Gov. Greg Abbott is eager for Musk to make it official and believes Musk is executing the move.
In July, Abbott said on CNBC’s “Squawk Box” that Musk told him he’d acquired a Texas driver’s license and is a “bona fide Texan now.”
When reached for comment by CNBC for its latest story, Abbott declined further comment on Musk’s plans.
According to Bloomberg’s calculations, Musk could owe California upwards of $18 billion if he executed the options and sold all ensuing shares at their current trading price.
If he lived in Texas, he’d be free of that entire tax bill. Texas doesn’t impose income taxes and is among the nine states without capital gains taxes.
Identifying Musk’s home locations has proved to be a challenge. CNBC was unable to find any public records that suggest he’s officially changed his residence, and the White Pages online database still lists his primary address as Los Angeles.