Either way, he should have been taxed at ltcg, so at most 20%.

He started out with 22,203,018 shares and before the latest purchase had 21,888,416 shares, for a total of 314,602 sold shares (or a mere 1.4%). If anything that's a surprisingly little amount of shares sold considering it is the bulk of his net worth. Note that he's a billionaire if you count the equity in Square, his Twitter holdings come out to $645M (counting a cool $54 net gain on his TWTR holdings today!).

Though he almost certainly got cash before too -- DST bought $800m of shares in 2011: half new shares, half from founders and employees

http://www.mercurynews.com/wiretap/ci_18596988?source=rss

plus he had 23.4mm shares pre-ipo

http://www.businessinsider.com/the-folks-cash-flushed-from-t...

And why would he have to sell shares during the ipo? As far as I understand, he should have had virtually no expenses, assuming he (as all founders should) did an 83b election early on.