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There is no connection between these two at all

I am sure there is no connection between these two events at all…

  1. California is going to impose a 0.4% tax on residents with a worldwide net worth in excess of $30,000,000. The proposed tax applies to anyone spending as little as 60 days in California. Finally, it continues to apply for 10 years after you leave the state if you were a resident when the Bill passes (which it has not yet)
  2. Elon Musk is moving to Texas (which has no income or wealth taxes).

Elon Musk, who is worth a mere $182.9 billion as of writing, and therefore would owe $731.6 million in wealth taxes each year for 10 years if he was a resident of California when the law passed, definitely did not decide to move to Texas due to taxes. I am sure he is a fan of Chilli.

By the way, Musk does not have $731.6 million in cash so he would need to sell shares to raise this amount each year. Given the massive capital gain on Tesla shares it is estimated the wealth tax and the capital gains tax each year would be over $1.1 billion each year for 10 years if he stayed in California.

By Ken Mansell

As a stay at home Dad most of the week this is my way of pretending I am still the tax counsel of ASX and SEC listed companies, working at big 4 firms, working at the Federal Treasury, on the Henry Review and at Parliament House for the previous government.

One reply on “There is no connection between these two at all”

[…] Mackenzie Scott is worth $60 billion, already owns a massive house in California as well as in Seattle and as an author can work anywhere. So if she moves to California for more than 182 days a year, she saves $600 million in Washington State Wealth Tax each year. Of course California is proposing its own Wealth Tax but the rate is only 0.4% but maybe she should follow Elon Musk on this one (https://taxrambling.com/2021/01/17/there-is-no-connection-between-these-two-at-all/ . […]

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