Elon Musk could have a silent partner in his $44 billion deal to buy Twitter Inc.: the U.S. tax code.
The head of Tesla Inc. and SpaceX announced Monday an agreement to take Twitter private for $54.20 a share, pledging to equity finance $21 billion himself and use a $12.5 billion loan with his Tesla shares as collateral. Banks are committing another $13 billion in debt financing. Critics, including Senator Elizabeth Warren, say he is only able to do that because of lax taxation of billionaires.
“If you look at Musk’s ‘income’ as defined by our tax code, you see that the guy is really rich, but not rich enough to buy Twitter,” Steve Wamhoff, the director of federal tax policy at the left-leaning Institute on Taxation and Economic Policy, said. “When you look at a more complete definition of his income -- including the parts that are not included as taxable income under our tax rules and thus not taxed -- then you start to see how the guy can buy Twitter.”