Tesla Reported Zero Federal Income Tax on $2B of U.S. Income in 2024
itep.org
itep.org
Difficult to tie this to executives versus shareholders. Options are taxed.
FINRA 2360 provides disclosure and tax requirements to any organization which issues options, provides grant exercises, or simply issues stock as compensation: https://www.finra.org/rules-guidance/rulebooks/finra-rules/2...
Side note: the regs are partly why you can see detailed information about types and amounts of stock and option activity by different investor classes in tools like https://www.barchart.com/investing-ideas/insider-trading-act...
Nitpick: FINRA rules only apply to FINRA members. For the general versions, you want the SEC rule. (FINRA copies a lot of SEC rules so they can enforce them without the restrictions of a government.)
Only the population pays taxes before their costs.
You'd rename line items and move on. Companies can't deduct any expense. The chief ones are things they've already paid tax on, e.g. wages subject to payroll and purchases subject to sales taxes.
Not that simple. Plenty of individuals pay a negative income tax. Plenty of individuals deduct various expenses.
And if you're a sole proprietor, you get to deduct expenses like a corporation. Labour v capital != corporations v people.
They're built on a similar principle: you tax earnings. That's why we have a standard deduction. The point was to cover living expenses.
It's clearly not doing that, but the logic is similar. (I'd raise it to $50k+. Cover the cost, about $500 to 600bn, with new tax brackets at $10mm, $100mm and $1bn; a modest increase in the capital-gains rate; and by closing the carried-interest loophole.)
Totally correct. Ironically, a classic labour vs. capital argument holds water better than people vs. corporations. We absolutely tax returns on labour too much in America and capital not enough. That doesn't really result in concluding that we should let people deduct more expenses or corporations pay on their top line. You're still working at the level of abstractions.
I'd be upset the most at:
> Congress might give Tesla even more tax breaks. A bill passed by the House of Representatives in the previous Congress would have retroactively reinstated a provision allowing full expensing of research and development expenses which could save the company up to $2.4 billion in taxes.
You've never called your elected? I've literally worked on the language of bills because I was the only one to call in about a bill that had to be voted on, nobody in my jurisdiction cared about and the staffer who was chargdd with it couldn't give fewer shits about the issue.
Always assumed that the elections is exactly about it
https://taxfoundation.org/data/all/federal/summary-of-the-la...
Tesla makes revenue, and they have costs. Their revenues are offset by their costs.
Any profit Tesla makes is eventually taxed -- either when Tesla shareholders sell appreciated stock, when the company makes distributions or when they liquidate.
Corporate tax only applies to un-distributed profits carried forward from year to year instead of invested into the business or distributed to shareholders.
Yes and no. It's clearly an abuse of the tax code. But the idea that a company would have different books for the IRS and itself is no different than you probably having a different set of "books" for your household budget and tax filings. They're held to different standards of precision and serve different purposes.
> My labor is turned into profits for my employer and similarly their profit is eventually taxed.
Your labour is tuned into revenue first. There are plenty of companies burning through cash for 10 years before making a single cent of profits.
People also have costs some of which are tax deductible, yet their income is seen to be completely taxed before costs are deducted. In both personal and corporate taxes, some costs are deductible and others not. People understand this.
The point is that people find it a violation of norms how a company can arrange its taxes in a way that a salaried individual basically never can: to basically not pay any taxes while enriching some specific people more than others.
Feels like a fatal flaw in the law if you can bypass paying the corporate taxes in that way.
That is individual tax - not the tax payed by the corporation. Normally the tax is payed twice. Tax from the corporation profits and then the individual employee/shareholder tax based on their income.
Payroll tax is the second check you're looking for.
Tesla is almost certainly fucking around. But the concept of taxing corporate profits--versus earnings--is solid. You massively favour high-margin (tech) over low-margin (manufacturing, service, anything with physical assets) and incumbents over new entrants if you tax the top line.
Now what can be called cost is very reasonable question. Clearly dividends or stock buybacks should not be costs. And thus such spending should only come from post tax money...
It does. Dividends and stock buybacks are not tax deductiable [1][2].
[1] https://www.thetaxadviser.com/issues/2022/sep/paying-dividen...
[2] https://www.grantthornton.com/insights/alerts/tax/2024/flash...
That's what SF instituted with Prop C -- only to see an exodus of low margin tech companies.
I guess you could make a case for double-taxation but... why?
At these rates, This means the government takes 72 cents out of every dollar of profit.
> Individual tax rates in California are as high as like 52%.
Can it also be an effective rate, yes, pretty close anyways.
Then you can also take loans based off of that to make sure you never have to pay taxes again.
> Then you can also take loans based off of that to make sure you never have to pay taxes again.
You can borrow against the after tax amount yes, you'll pay interest on it and when you die, you will pay the capital gains. On your final tax return, you are required to pay taxes on all of the capital gains you up to your departure. This resets the tax basis for your heirs.
But in which jurisdictions is that tax payable, and at what rates?
Net income. The article's $2.3bn 2024 "U.S. income" lines up with Tesla's (global) $2.32bn net income (on $1.6bn operating income) [1].
[1] https://www.cnbc.com/2025/01/29/tesla-tsla-2024-q4-earnings....
Or why do I have to pay taxes instead of nothing because I invest in my company aka me?
But I doubt your employer will be too happily to now pay your salary as an invoice to a subcontractor...
You may find it's easier to just pay tax... Also look up effective tax rate vs actual tax rate...
I know many people who despite having a significant portion of their salary being taxes, when you look at their Revenue and Expenses for a given 12 month period they in fact paid no tax.
Your specific situation may be different, but you aren't a corporation.
Yeah, it's mechanically different from individual income taxes, but in general Americans don't know how taxes work.
I've had coworkers in the past who believed that if you made juuust enough money to enter a new income tax bracket, you'd actually have less take-home than before. They thought that the entire income was taxed at a new rate, instead of just the marginal dollars that spilled into the new bracket.
I'm sure if we really unpacked the numbers, we'd see that all of Tesla's employees' salaries that were exempted from Tesla's "taxable income" meant plenty of income taxes being paid over to the government for social welfare and other spending.
No one wants to go down that rabbit hole, because we'd then have to have an honest discussion about why I, as a human, don't get to deduct most of my personal expenses and only pay tax on my "saved" or "non-spent' income. At that point, we'd be getting almost 0 tax income because most people spend a huge chunk of their income on necessary survival and arguably in the "cost" of being an employee.
If we applied a 20% income tax to corporate entities, then buying a car through a dealership would cost 20% more than buying direct from the factory.
You can imagine what that would do to intermediary-heavy transactions, like when I give pension money to a fund marketplace who buy a fund who go to a stockbroker and buy shares; I'd end up paying 20% tax four times in a row.
Of course the problem with letting companies deduct expenses is they can deduct sham expenses to move expenses between tax regimes. Sell your brand name to a company in a tax haven, pay a per-product 'license fee' for the right to use the name, and suddenly you're making zero profit in the place you do all your operations, as all the profit is, on paper, being made in the tax haven.
You'd also have to add a massive border-adjustment tax, because otherwise I wouldn't buy it from the dealership or the factory, but buy it in Mexico--where producers don't have to pay the tax--and then drive it home.
Not super applicable for a car, I know, but it's a general problem with taxing legal fictions.
And socialism based on the idea that everyone is greedy and we should prevent that for betterment of everyone.
For socialism and communism to work, you have to limit greed, envy, and sloth.
That Apple, Google, Amazon, etc do not pay their taxes either makes it worse not better.
The rich have accumulated a lot of money, that is killing the economic system. Redistribution of that wealth is needed for the system to continue working, and taxation is part of the solution.
Google paid $18 billion in 2024, and Amazon paid $10 billion.
The problems in taxation come when a company's spending isn't benefitting the area/country or its employees' taxable income. Buying offshore yachts to rent back, sinking money into highly-depreciative assets (eg company cars) that might not be taxed as employee benefits. There's a lot to unpack but the bigger you are, the easier it is to hide a few billion dollars from the national taxation service by hauling it off to another area.