Billionaires have used charitable donations as a way to avoid tax for years, and Elon Musk is one billionaire who has been receiving heavy criticism for attempting to do it in the upcoming tax season. The Tesla CEO is estimated to face a tax bill as high as $16 billion. He’s suggested that he could donate billions of dollars to end world hunger, and there's been a rumor circulating that Musk will donate billions of dollars for reparations to African Americans.
Amid the reparation rumors, on Nov. 8, Musk’s company SpaceX had its spacecraft, Dragon, return to Earth from the International Space Station.
Where did the Musk reparation rumors come from?
The rumors of Musk donating $250 billion for reparations to African Americans stemmed from a satirical article by Viral Cocaine. The website reports satirical stories on celebrities and urban folklore—its motto is “when the lie is more entertaining.” The false Musk article had over 7.2 million shares on social media.
It’s easy to see that the story is fake, as it makes several egregious claims. Some include false statements made by Klu Klux Klan members with fake titles and names. The blog also mentioned non-existent members of the Black Panther Party.
The net worth of Musk and the market value of Tesla were also inaccurate. The article claimed that Musk is worth $1 trillion and Tesla had surpassed $3 trillion in market value. Musk is certainly one of the world's richest people, but his net worth is around $311 billion—not even close to half a trillion dollars. Tesla has a market value slightly over $1 trillion.
The article was shared on Instagram and went viral. Many people who saw the post assumed it was true and ran with the concept.
Musk could donate money toward ending world hunger
On Oct. 31, the Tesla CEO tweeted that if the United Nations World Food Program can explain to him how $6 billion will solve world hunger, he will donate that amount. Musk suggested that he’d sell his stock to provide the funds.
On Nov. 6, 2021, Musk acknowledged on Twitter that unrealized gains on his stock holdings could help him avoid tax, so he proposed that he sell 10 percent of his Tesla shares. He created a poll asking if people support his sale of the shares, and stated he would comply with whatever the final results were.
He later tweeted to admit that he doesn't take a cash salary or bonus from anywhere, and the only way for him to pay tax is by selling his stock. The poll concluded with the majority of respondents voting in favor of Musk selling his Tesla shares.