Get Elon Musk’s money out of politics—for good.
Representation without taxation
Elon Musk paid no federal income taxes in 2018.
From 2014 to 2018, his wealth grew by $13.9 billion. Yet over these same four years he paid just $455 million in federal income taxes—a mere 3.27% rate. For comparison, in 2018, the average American paid an effective tax rate of 13.3%.
This modern inversion of “taxation without representation” gives billionaires outsized political representation while they avoid taxation. Our retirement funds unwittingly support a system where the ultra-wealthy use legal tax loopholes to shift their fair share onto the rest of us.
When we invest in Tesla through your 401(k) or other retirement accounts, we help the world’s richest person avoid taxes while we pay our full share. Every dollar that props up Tesla’s stock price increases Musk’s borrowing power and political influence.
How do billionaires use wealth to leverage political power?
Every dollar invested in Tesla—whether through direct stock purchases or bundled in mutual funds or exchange-traded funds (ETFs)—helps to sustain Tesla’s stock price, indirectly enriching Musk. As Tesla’s largest shareholder, Musk leverages his stock holdings to access vast sums of cash without selling shares, using a strategy common among billionaires: securities-based lending.
What’s the advantage of this form of lending?
Unlike most Americans who must sell assets to access wealth and, as a result, pay taxes, securities-based lending lets Musk borrow against his Tesla shares and avoid paying (capital gains) tax.
Financial leveraging
When Tesla’s stock price rises—bolstered in part by investments like exchange-traded funds—Musk’s borrowing power increases, allowing him to tap into billions. For instance, Musk secured a $12.5 billion margin loan backed by his Tesla shares to facilitate his acquisition of Twitter. In total, Musk has pledged more than half his Tesla shares as collateral for personal loans up to $3.5 billion.
When acquiring Twitter/X, Musk initially planned to use Tesla shares as collateral for loans but ultimately sold significant shares to finalize the deal, turning stock wealth into liquid financial power.
The borrowing capacity effect
A rising Tesla stock price expands Musk’s borrowing potential, subject to regulatory and banking limits. Due to Tesla’s stock volatility, banks typically set conservative loan-to-value (LTV) ratios. Tesla executives can use their shares as collateral to borrow up to 25% of the value of their Tesla stock.
This structure allows Musk to access liquidity without triggering capital gains taxes, but also exposes him to margin calls or the repaying of some of the loan if Tesla’s stock price declines.
Our government shouldn’t be Musk’s next corporate acquisition.
DIVEST FROM TESLA