Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income | Hacker News Reader

Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income

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318 pointscdme236 comments

I wish this article was written with a less biased tone. I'm genuinely interested in understanding it better.

As far as I can tell, the article cites two things: $500M tax savings by using an accelerated depreciation schedule (unclear if they saved $500M more by using accelerated vs a regular depreciation schedule, but I assume no) and they claimed $300M in tax credits.

The article doesn't address the other $1.5B, presumably because it's easier to defend. I didn't read through the 10-K to try and figure this out.

I don't really know enough about what an accelerated depreciation schedule implies, but, taken at face value, they'd have to pay more in taxes in a deferred year which doesn't seem like foul play to me. Tax credits seem to make sense for an EV company?

EDIT: I did some learning, woohoo.

Federal corporate tax rate in America is 21%. The $300M in tax credits is post-tax not pre-tax. The $500M is a pre-tax deduction.

$2.3B - $0.5B = $1.8B

$1.8B * 0.21 = $378M

$378M - $300M = $78M

So, I can't really explain why they didn't owe ~$78M in taxes, but I assume rounding and cursory other stuff. The article probably didn't call out other, minor deductions, but it's also fair of them to not have done so. I was wrong when I said, "The article doesn't address the other $1.5B, presumably because it's easier to defend."

I think the real thing here is the weaponization of EV tax credits as some sort of boogeyman. Personally, I'm all for incentivizing EV companies to create in America.

I think the point of the accelerated depreciation is roughly equivalent to taking a loan with 0% interest. It's allegedly zero-sum with respect to net income. They get to claim this income later, with various benefits, e.g. more cash on hand in the intervening period, inflation makes that "debt" less valuable later, and it's possible that the corporate tax rate will be lower in the future, so the tax rate on "this year's" income is lower.

That makes sense, thanks. Inflation makes debt cheaper to pay off in the future and transitioning into a right-leaning government hints at corporate tax rates being more favorable in the future.

I guess the caveat here is that it can be adversarial to short-term investors since the businesses assets are becoming worth less more quickly which gives less time for income to offset those expenses. That makes the company's expense:value ratio look worse.

I don't think the answer is to say that everyone needs to follow a linear depreciation curve. Fancy, new tech depreciates much more quickly in its early years than well-established tech. So the basic concept seems to make sense in some applications and I would assume Tesla has some pretty fancy tech that they're investing in.

On the other hand, this area feels a little fishy to me because a more accelerated curve limits the ability for a government to effectively apply taxation to companies during their administration. If companies were able to instantaneously depreciate their assets for 100%, assuming investors were OK with it, they'd just do that whenever the political winds blew in their favor for maximum savings.

It doesn't seem like there's any perfect, one size fits all solution. Accelerated depreciation seems fine, and can reflect the reality of investing in certain tech, but can also be abused by giving companies the ability to cash in when the time is right.

The way depreciation works is that a company buys something, like a computer, which is a business expense. Then at the end of the year, you're out the $2000 that you paid, but you still have the computer, which is now a used device and is now a year older. So it's no longer worth $2000 but it's not worth nothing. Suppose it loses $500 in value. Then the book value of the asset becomes $1500 and you have depreciation expense of $500. That depreciation is the deduction for this year, they don't let you deduct the whole $2000 the year you bought it. Next year you can deduct some more, until the book value of the asset is scrap or you dispose of it or sell it.

Estimating how much value it lost is subjective so the government specifies what percent of the value you can deduct each year. Straight line deprecation is when the depreciation expense is the same percentage of the original cost every year. Accelerated depreciation is when the early years use a higher percentage than the later years. In both cases the total amount of depreciation is the same but accelerated depreciation is often a better approximation for actual value. The true market value of a piece of equipment will decline more in absolute dollars in the first year than the fourth year. It's also what businesses typically pick when given the choice, because a bigger deduction now is better than a bigger deduction later.

It's not any kind of tax dodge at all, it's just an accounting method in the tax code.

> Tax credits seem to make sense for an EV company?

That's one of the things that I've found odd. A lot of people that very strongly support things like tax credits for EV cars, in order to fight climate change, will then turn around and talk about how terrible they are when they're actually used, such as in the article here. A lot of times people don't seem to have a consistent view of what they actually want, and will be outraged by the results of policies they themselves supported.

One can only imagine the headlines if these environmental credits were cancelled ("anti-environmental actions are going to bring about climate change and doom us all").

I may be the only one, but I was under the impression this whole time that all EV tax credits were for consumers who buy EVs, not companies who sell them.

It amounts to the same thing, no?

Definitely not, no. Credits on profits incentivize short term profit taking, while credits in products incentivize number of units shipped. The second is much better for society. Think about it from the perspective of a company deciding between selling low margin cheap EVs in the short term before process efficiencies kick in, or selling expensive EVs now.

The idea is to stimulate both supply and demand. Credits for consumer only stimulate demand which may not be enough to compel literally hundreds of billions of dollars worth of CapEx, not to mention opportunity cost.

Consumer credits stimulate demand by increasing the cost consumers are willing to pay for a vehicle, shifting the demand curve, and greatly increasing the profitability in selling cars, provided it is done at scale. It can most definitely compell hundreds of billions of dollars of CapEx, and in many ways it's more effective than a tax break, because it will reduce losses if the venture never ends up being profitable (unlike a tax break which will only be worth it if the venture is eventually profitable, so there is less risk), and if it provides future market share through investments in the low end, especially in international competition, it can end up spurning more CapEx as it makes the more capital-intensive strategy more viable.

It isn't a tax credit for making profits. It's a tax credit for making EVs. The reason there are credits for both consumers and manufacturers is that the manufacturer credits provide an incentive to build EV factories in the US, even if some of the cars are for export.

But we don't care about more profits, we care about more EVs. If you want to create an incentive to make EVs that are exported then you can make one, for example by subsidizing production equipment or by providing a per-unit sold refundable tax credit.

> But we don't care about more profits, we care about more EVs.

Which is why the tax credit is for making EVs.

you're just circling back to the GP's last comment, without refuting that comment.

>Credits on profits incentivize short term profit taking, while credits in products incentivize number of units shipped. The second is much better for society.

There aren't credits on profits. There are credits for making EVs (which the manufacturers get) and for buying EVs (which the customers get).

They are, by definition, credits on profits made from selling EVs, and not from selling EVs. If Tesla made EVs without making a profit they wouldn't have received a penny.

They're credits against taxes. Since corporate income taxes are on profits, that implies that there would have to be some profits in order for there to be taxes to take the credit against, but that doesn't make them credits on profits. If they had made more profits without making more EVs, they wouldn't have gotten more credits. If they had made more profits but offset the taxes with some other credits then they might not have been able to use these, not because they didn't make enough profits but because they didn't pay enough taxes.

And this works the same for the consumer EV credits; you can't get them unless you were paying that much in taxes.

If your point is that non-refundable credits are stupid, yes. All credits should be refundable. But that doesn't have anything to do with whether they're credits for the manufacturer or the consumer.

Making the consumer credits non-refundable is actually worse, especially for the credits on used EVs. Because then you can't get the credit if you're unemployed or a student or otherwise don't make enough money to be paying the value of the EV credit in taxes, so it becomes a tax credit for the affluent that the poor aren't eligible for.

There were vehicle sourcing credits in the Inflation Reduction Act, which are granted per kWh of battery with sufficient domestic mineral content. Was $4,000/vehicle if I recall.

lol! No no, this America! Automakers are actually buying and selling EV credits to eachother. Tesla often would have been in a loss position and possibly bankrupt if the big 3 auto makers weren’t buying credits from Tesla so they could get their fleet averages down and keep making trucks and SUVs.

They are, but typically what automakers will do is assume the tax credit on your behalf and just give you $7,500 off the price of your car up front. They will then collect $7,500 come tax day.

That's a win-win all around, the consumer saves $7,500 off the list price up front, they have to finance less etc, and Tesla gets a tax credit.

Those are different credits. There are (if they didn't expire yet, don't remember) federal tax credits for buyers, but separate system is for manufacturers where if you make cars, you need to make some of them EV, or buy credits from somebody who does (e.g. Tesla).

In reality, what is more damaging for the environment?

Replacing a 2019 Toyota Rav4 with a 2025 Tesla in North America, or.....

Replacing a 1985 VW Jetta with a 2019 Toyota Rav4 in India?

I see YouTube videos all the time where people in third world countries are using turn of the century hit-and-miss engines to power things like water pumps or machine tools. These countries are leaking countless gallons of oil and fuel into the ground using engines and equipment that are over 100 years old when Habor Freight sells brand new engines for $150.

To me, the ease with which you can sell a new car to a yuppy in the USA (who doesn't even need a new car) is baffling. Dollar for dollar, there is so much low hanging fruit. Don't get me wrong, I want to see first world countries lead the charge, but yuppys need to be more realistic in their "environmental" decision making. There is nothing frugal or environmental about having a 20" touch screen in the dash, or replacing your >5 year old car.

The American Rav4 is probably doing a lot more miles/year than the Indian Jetta. So it'll emit a lot more CO2.

Every car that is sold retires an old one. And the one it retires will be the least valuable.

This happens becauase the person who buys a new car sells their old one to someone else, who sells their old one to someone else, and so on down the chain.

The oldest cars from America go to other cheaper markets replacing the cars in use there.

I don't think anyone in India is buying old American cars

Especially since India drives on the left, and hence uses right-hand drive vehicles. American vehicles are almost all left-hand drive, which are illegal to drive in India – you'd either have to pay for an expensive conversion, or manage to get a rare legal exemption (reserved for historical vehicles, foreign diplomats and official visitors, and other such special cases) [0]

You can import used cars into India, but you'd generally be bringing them in from a left-hand drive market such as Japan, Australia or the UK. Plus, Indian law says import used cars have to be less than three years old, because India doesn't want to become a dumping ground for other countries old vehicles (which also undermines their local car manufacturing sector) [1]

[0] https://auto.hindustantimes.com/auto/cars/g20-summit-can-one...

[1] https://www.acko.com/car-guide/how-to-import-foreign-cars-to...

Does this actually happen?

With some exceptions, there’s going to be a point where a used car is not worth the trouble to ship it somewhere.

And Americans love their huge ass cars. I can’t see many cheaper markets wanting to use an American car, just for the fuel cost alone.

I bet the cars get trashed for scrap or parts.

> Does this actually happen?

Absolutely it does. If you live near the Mexican border of the US, it’s extremely common to see older cars being towed headed south, presumably to Mexico. It’s not particularly expensive to drive them down to the border.

> I bet the cars get trashed for scrap or parts.

Only the least valuable and oldest ones that other countries don’t work. That means you’re overall moving up the modernness of the fleet. Presumably with better fuel economy, lower emissions, and fewer problems.

> presumably to Mexico.

Also to Belize and other parts of Central and South America. They don't all stop in Mexico.

True enough. I suspect many aren’t going to South America since you can’t drive them there… but you can certainly drive all the way to Panama. If you want to head past Panama seems like it’d be easier to ship them directly from the US to their final destination.

>Every car that is sold retires an old one.

I'm about to purchase my first car, a Tesla! Whose vehicle will be retired by my purchase?

Someone who has already bought their last car and it ends up sitting in a garage forever.

> The oldest cars from America go to other cheaper markets replacing the cars in use there.

Why are you assuming other cars are being replaced? Those other markets are not at saturation. What is being replaced could very well be a bicycle.

The efficiency improvements are generally going to start in the more developed countries and eventually reach elsewhere. But this is less certain with EVs.

> These countries are leaking countless gallons of oil and fuel into the ground using engines and equipment that are over 100 years old

Pre-1925 engines must be a minuscule fraction of all engines in active use, even in poor countries.

"India is on track to become the largest EV market by 2030, with rise in investment over the next 8-10 years."

https://www.ibef.org/industry/electric-vehicle

I'd imagine that they are different people. Arguing with crowds can be a bit frustrating because the crowd will argue strongly in favour of something, then the winds shift and the crowd argues strongly against it without anyone really changing their minds. Ditto strongly believing contradictory things.

If we want to talk specifically about social media sites like HN, the conversation is really steered by the up/down votes rather than the people in the threads. Every possible perspective tends to get a comment then the gestalt decides which ones they like. The upvoters anonymous and the downvoters are often ... a weird crew with motives that are often hard to divine.

>I'd imagine that they are different people. Arguing with crowds can be a bit frustrating because the crowd will argue strongly in favour of something, then the winds shift and the crowd argues strongly against it without anyone really changing their minds. Ditto strongly believing contradictory things.

This is a good point. It took me a while to realize this. It is like "winds" are magnified and out shout the prior wind.

A similair concept politically is when some people want to punnish you for some other people holding it wrong or something.

> The article doesn't address the other $1.5B

$2.3 billion was the income, not the tax bill.

Presumably $500M accelerated depreciation and $300M of tax credits covered the effective tax bill on $2.3B income.

How would $800M in deductions cover $2.3B income to the tune of a 0% tax rate? Wouldn't they still be on the hook to pay taxes on $1.5B or is it not that simple?

EDIT: Oh, apparently tax credits aren't pre-tax. So if their tax liabilities on $2.3B were $300M then they'd owe $0.

> Oh, apparently tax credits aren't pre-tax.

Yes, tax credits reduce the tax bill, not the taxable income.

When you spend money on manufacturing and equipment, a company does not get to write off the full amount against their taxes when they buy it - they may have to spread it over a period of useful life of that equipment.

Unfortunately, accounting is full of concepts like this.

Ideas which conceptually make accounting “better reflect” the real word, but in reality add a lot of complexity for very little benefit. Getting rid of accrual accounting and simply allowing full expensing of asset purchases with losses to carry over to the next tax period would save everyone a lot of headaches, for a negligible reduction in government tax revenue.

It would also make a lot of accountants redundant, which is probably the main reason they oppose streamlining accounting practices.

Tesla's a crypto company. 25% of Tesla's earnings last quarter were crypto:

https://cointelegraph.com/news/tesla-600-million-bitcoin-gai...

That's multiple years of increase being accounted for all at once.

So you're saying 25% of Tesla's earnings last quarter wasn't even earned last quarter and wasn't related to anything Tesla as business did?

Yeah, pretty much. The value increase of Tesla's bitcoins since 2021/2022 was being ignored for accounting purposes until just now.

It was due to the change in IRS guidance on how to account for increases in value in cryptocurrency -- in short, treating it closer to a forex exchange (where the value is continually accounted) instead of a securities transaction (where the value is accrued when sold). The value then had to be retroactively accounted for.

Simpler alternative to figuring out the accounting tricks and 1-year deferred taxes: Amortizing their earnings and taxes for the past ~5 years.

>I think the real thing here is the weaponization of EV tax credits as some sort of boogeyman.

It's a hot topic right now since Trump just ended the EV credits. Which you'd think Musk would want to keep.

And beyond this article, Musk has "quiet quit" on Tesla as a car company, based on his earning calls. They said little about cars and instead deflected the hype to "AI robots" in 2027. It's all just so weird.

I think the pivot makes sense. EV credit subsidies are drying up, let's pivot to subsidies for AI developments which the new administration may enable in order to maintain an image of superiority over foreign adversaries.

I don't think he's quiet quit but interest rates are high and he's realized there's way more money in robots and self driving.

The goal of a good CEO is to be forward thinking and that's what he's doing. Tesla continues to grow on many fronts and is still accumulating money in the bank.

Meanwhile most other car companies are in big, big trouble. (Volkswagen, GM, etc)

The potential sales of robots is huge. Everyone I know with kids would easily pony up 10k for a robot just to do their dishes. It’s a massive untapped market.

> "hoard wealth"

> No mention of reinvestment

> "Tesla was able to avoid paying ... taxes ... by claiming ... tax credits" (presented as bad somehow)

> "We're not backing down"

Where or where is the media coverage that attempts to speak to people who don't already buy in to the premise? This isn't journalism it might as well be blogging. Congratulations, you've made the world more polarized!

In what world is a massively profitable company paying almost nothing in taxes polarizing?

Many people on this very website support large companies not paying taxes.

You have to come into the article believing a ton of things:

1. Tax credits are illegitimate

2. Accelerated depreciation is illegitimate

3. Ownership of productive companies is "hoarding wealth"

4. Journalism is in a battle with the current administration

5. Paying taxes is a good thing

If you _don't_ buy into these premises, for which there is no argument given for or against, you'll be tilted against the author. If you do, you'll be tilted against Tesla. This is polarizing. There is no nuance, there is no learning, there is no insight.

> 4. Journalism is in a battle with the current administration

Is this controversial?

Yes, as it should be. Criticize the policies, not an administration led by a party you don't align with.

One of the policies is that if you are at all a journalist you are an enemy of the state.

During his rallies he'd literally have the entire crowd riled up against the very concept of journalists, because they might not suck up to him every single second of every single day.

Seriously, where do comments like this keep coming from?

Maybe it's better to say the current administration is battling journalism, in a one-sided way. There's a real difference, but it looks too much like splitting hairs.

What about criticizing a lawless administration, filled to the gills with unqualified sycophants, bereft of empathy, kindness, and all human decency?

yes, the biden admin was pretty bad but what do you think about the trump administration?

Two wrongs don't make a right. A news source that endorses a political candidate is difficult to trust, and plenty of them don't.

Why not both? The administration doesn't stop this, the policies suck and only transfer weath from the working class to the elite

It's more the administration is attacking journalism than the other way around.

For example, the FCC regularly receives complaints against pretty much every broadcaster that they are biased and the FCC regularly dismisses those because broadcasters are supposed to be allowed to take positions that politicians may disagree with.

Until now. The new FCC chairman reinstated complaints against all the major network stations that were alleged to have a liberal bias and is now subpoenaing them, and did not reinstate any complaints against major network stations (e.g., FOX) that allege conservative bias.

How about simply the principle:

1. I should be able to deduct the same sorts of things from my individual income that corporations routinely deduct from their income.

If a corporation can legally shield all of their income from taxes, why can't I shield all of my income from taxes? Corporations can deduct the costs of all the things they have to do to make money and do weird depreciation tricks, but I cannot deduct the costs of all the things I must pay for in order to make my own income.

You do. The biggest of all tax giveaways is the home mortgage deduction and tax deduction on employer paid healthcare. The tax sheltered things like retirement accounts, HSAs, Roths, college savings plans, energy credits, home improvement credits, car breaks, annd do on, are also huge tax giveaways to citizens. Those are the biggest tax breaks in all US law, far larger than all of corporate breaks combined.

Then, as a citizen, you have tax cuts for kids, for school, for various small enterprises, for local this and that by jurisdiction, you do get depreciation on lots of goods. I could go on for the thousands and thousands of pages of personal income tax law.

Being ignorantly of a thing to arrive at outrage is still ignorance.

None of these things, or even the combination of all of these things, allows an individual to shield 100% of their income from taxes, the way corporations shield their income from taxes.

They absolutely do! Earned Income is a refundable tax credit - 47% of all Americans pay no net income tax, and some receive a refund in excess of any taxes paid.

* excluding payroll tax deductions, both personal and employer paid (which is effectively still a tax you're paying). They also pay sales tax, which isn't an income tax per se, but when you have to spend every dollar you make to survive, it might as well be.

Everyone contributes.

I think tax on labor is actually tax on corporations. The only tax on corporations that the corporations can't dodge.

If you have enough rolloverloss from one year to another, then you can pay 0%, same as a corporation. In fact, over 40% of people pay zero federal income tax, and a significant amount get lots of govt money, so they’re getting effectively a negative income tax.

The vast majority of corp pay income tax, unless (and this is nearly never many years in a row) they have such tax rollovers from prev year.

Now, they also still pay property taxes, enemployment taxes, half your SS, taxes on goods bought, and a host of other taxes, independent from income taxes.

All your outrage is simply ignorance of how taxes work, and so far you’re wrong about all your unfounded belief. Go read how taxes work, learn to read SEC filings. CBO has detailed solid reports prepared covering all this stuff.

When you think something about taxes is outrageous, it’s going to be because you don’t understand them, and you’ve filled your head with tripe from sources designed to mislead you. Read actual tax law and filings, and all this misunderstanding will go away.

I think it’s outrageous that the IRS doesn’t just compute taxes for us. And I think it’s ridiculous US citizens have to file regardless of where they are.

You mention mortgage interest deduction, EV tax credits, and energy credits. I'm pretty sure corps qualify for all of those, and with no SALT cap. Then they get to deduct food, rent, utilities, and car ownership/depreciation, which I can't. And their tax rate is flat. There's a reason people find loopholes to push personal expenses into businesses, not the other way around. I would most likely pay less tax if I were somehow a corporation, even if it meant losing my 401(k) and HSA.

Of course, you can't literally compare corps to people. Their profits are ultimately paid out to individuals and taxed again. People don't exactly have revenues. So I'm not saying the current way is wrong, but the statement you're responding to isn't ignorant.

This is one of the most galling things you realize when you start doing business taxes. If individuals were able to deduct expenses necessary to earn income like businesses do, that would include most meals, full cost of housing (not just mortgage interest), most utilities, vehicles [0], etc. And there would be no "standard deduction" to clear, either.

[0] official IRS policy is that "commuting" expenses are not deductible, but practically you declare the principal place of business as your home, and then anywhere else you go is no longer commuting.

Didn't the Nortel CEO in the 90's get an allowance from the company for all that personal stuff?

I don't believe those things and still don't disagree with the author. Because the article is too devoid of real information for me to have an opinion on this.

context matters a lot, that's your nuance:

1. tax credits are legitimate. But who is using it and on what matters. getting hundreds of millions of tax credit to make horribly constructed cybertrucks does not inspire confidence. But I did want more EV benefits (those are gone now. Alas. "Drill, baby, drill"

2. I don't really know enough about accelerated Depreciation to comment

3. Ownership of productive companies is good. Keyword: "productive". Tesla has been cutting staff, closing dealerships, and again with the cybertruck. "profitable" does not equate to "productive" in my eyes.

4. Yes, Journalism for the most part is in a battle with the current administration

5. Always the fun topic to talk about. As a concept, paying taxes is good. Any more deliberation into reality may as well be its own separate topic. I do personally think corporate needs to provide more taxes, but Trump clearly disagrees this year (corporate tax cut from 21% to 15%, I believe).

If they depreciated some assets faster, that only delays the taxes by a year or two. They'll still pay.

$300M in tax credits is basically the same as them paying $300M in tax and then getting a big check from the government for meeting some goal. I don't think it should be treated as any kind of avoidance on behalf of the company. Instead, check if the government paid that money for something useful, and if they didn't then blame the government.

Maybe they assume tax rates will be better for them in 2026. Under that assumption, deprecating things now to shift the tax burden to the future is kind of avoiding tax (or more accurately: the 2024 tax rates).

Given the level of corruption in the US government in general and the role of Musk in the current administration in particular that doesn't seem unlikely to me

I do think he has inside information that corporate taxes will go down.

I mean you don't have to exactly be a government insider to bet that, at a minimum, corporate taxes won't go up under the current administration.

At least among economists it is not that polarizing. Most agree we should get rid of corporate tax. [0] In reality a corporation cannot pay taxes any more than a table can. Only people can pay taxes. So who pays the corporate tax? It must come from the corporation's consumers, employees, or shareholders (or some combination thereof). Raising the corporate tax is just a sneaky way of raising tax on one or more of those three groups.

[0] https://www.npr.org/sections/money/2012/10/18/163106924/a-ta...

>Only people can pay taxes.

But corporations are people..? Can't have it both ways right :/

Unless I'm missing something here.

You could probably get most economists to agree people shouldn't pay income tax either; they are a distorting influence. Land/economic rent taxes really are the way to go.

Yes. Corporations are made of people, and they produce goods and services for other people. The people that compose that corporation pay the tax, or the people they sell to.

But companies are legal entities, they can buy, sell and own stuff. They aren't just a collection of people. They can make profit, some huge amounts, and they should pay taxes for that.

You don't understand that in the US's capitalism corporations are people. That's why they are able to use infinite money to influence elections (because in American CAPITALism, corporations' usage of money equals free speech and you can't limit people' speech). Yes, I agree, it's absolutely insane.

Google "Citizens United v. FEC" Supreme Court decision.

Conveniently, they are people only when it comes to corruption and influence. But not when it comes to rules or punishment (like if a corporation killed people, it should be possible to give it a death sentence).

"The court held 5–4 that the freedom of speech clause of the First Amendment prohibits the government from restricting independent expenditures for political campaigns by corporations including for-profits, nonprofit organizations, labor unions, and other kinds of associations."

? I don't see what's insane about this

The owners of a corp aren't the ones paying tax. The corp has its own balance sheet.

> a corporation cannot pay taxes any more than a table can

That's just, like, your opinion, man.

Seriously, they're two entirely different classes of things. One is an inert physical object, the other is a legal instrument that can collect and retain money, and shelter its shareholders and employees from legal and financial outcomes.

If I asked the average person on the street, which of these two things do you think would be more likely to pay taxes, they would look at me like an idiot.

A corporation can't pay taxes? But they do.

>In reality a corporation cannot pay taxes any more than a table can

The citizen's united ruling of 2010 disagrees with you, in the US at least.

>So who pays the corporate tax?

I don't know. the same one who pays for campaign donations. IANAL.

> In what world is a massively profitable company paying almost nothing in taxes polarizing?

I mean they didn't just decide not to pay taxes. They followed the tax law. They accelerated some depreciation to take it now at the expense of a higher tax bill later. They took advantage of some government credits.

Corporate taxation is only one point of taxation. They pay payroll taxes, they pay sales tax on equipment they purchase at their factories, their employees pay taxes when they get paid.

Low corporate tax rates are unpopular because the optics are bad, but it doesn't actually mean that money is flowing through the company and into their employees without taxation anywhere. As soon as they do nearly anything with that money other than buy more parts to sell, taxes are being paid.

Something is wrong with the tax law if this is an accounting trick that only a few companies can use this effectively, which I suspect it is. I also suspect that the CEO of Tesla supposedly being placed in charge of federal agencies will somehow reduce that future tax bill. Corporate tax doesn't have to be a thing, but if it is, it needs to be applied fairly.

Depreciation schedule is arbitrary to begin with.

Say a company spends $1 billion in 2024 to build a factory.

What is the "right" number of years (depreciation schedule)? 10? 5? 3? 1?

Whatever number N you pick, tell me why it's more "right" than N+1 or N-1.

> Something is wrong with the tax law if this is an accounting trick that only a few companies can use effectively, which I suspect it is.

Yes only a few companies could use this, but the main factor here is not really a trick. Any other company that sells electric cars and has 0-3% profit could do the same thing.

If you get a small tax credit per sale, and your taxes are 21% of 3% of your sales revenue, and that makes your taxes smaller than the credit, then you don't have to pay taxes.

I was referring to the advanced depreciation, not the EV tax credits. Tesla's profit margin is more than 3%. Per the calculations someone else did here: https://news.ycombinator.com/item?id=42893563 Tesla supposedly got $300M in tax credits, which is much less than 21% of their profit.

> I was referring to the advanced depreciation, not the EV tax credits.

The advanced depreciation only knocked out .5 billion from the 2.3 billion, and they'll have less depreciation in the next few years because of it. I'm not very worried about that being an exploit.

> Tesla's profit margin is more than 3%.

2.3 billion out of 97.7 billion revenue is less than 3 percent.

But another page is saying 2.3 billion is from the quarter, not the entire year? Then that changes the math some and you can counterbalance a bigger single digit profit with those credits. But if your actual worry is the depreciation then it's not worth analyzing this much further.

> Tesla supposedly got $300M in tax credits, which is much less than 21% of their profit.

It's not much less, it's a little bit off but we're using very rounded numbers to start with. When all the numbers are rounded to the nearest .1B, the napkin math being off by 78M just gets a shrug from me.

> they pay sales tax on equipment they purchase at their factories

Most states exempt equipment purchased by manufacturers from manufacturing their products from sales tax. I believe many also exempt raw materials that go into those products.

That Tax Foundation says [1] that both California and Texas (which I believe are the states where Tesla has factories) are states with such an exemption, although I'm seeing other sources that say that California's is just a partial exemption.

Tesla pays lots of taxes. They pay payroll taxes om their employees, they pay state sales taxes when they sell cars, &c.

This is specifically corporate income taxes.

Sales taxes are collected by the seller for the state but are paid by the buyer.

I mean, the website is pretty honest about its stance when it claims to be about "the history of political struggle", there is also a pop up that states that "journalism is a tool in the anti-fascist toolbox"

I completely sympathize with the desire for nuance, the problem is, there's an inherent tension between reporting facts and providing a nuanced view and galvanizing people into action. I think this venue is clearly trying to do the latter. This is not meant to convince anyone that this is a problem, it's meant to fuel the fire of people who do think it's a problem. Authors have different rhetorical aims whenever they write. You can challenge their use of the word journalism as a descriptor on these grounds, but it's not as though they presented any falsehoods. They are clearly writing to an audience. And, honestly, when problems really are as blatantly severe and bordering on catastrophe as they are today, there's really very little value in trying to convince stodgy people who still refuse to acknowledge a problem.

people who "don't already buy into the premise" make up such a tiny portion of the audience, that it just isn't worth writing for them. Companies paying their fair share of taxes is wildly popular, and I don't think it's worth getting bogged down writing for this vanishingly small population.

Truthout's bias is clear. That said, I think there is actually a lot of value when a society can accommodate journalists with clear agendas and ideologies. Truthout is, generally speakking, going to be skeptical of large wealthy corporations. That kind of bias leads to journalists sniffing out real stories like this one.

Don't get me wrong - I don't there the media landscape should tolerate only one or a narrow range of viewpoints. We are healthier when there is a diversity of angles being pursued in journalism. And ideally, high enough media literacy in society to recognize lies and low-effort garbage.

You know what’s ironic is that Tesla survived because of Obama era subsidies. They were desperate to get one private enterprise to succeed because so many solar and other “clean” energy private ventures failed during that period. So, in my view, Obama created Elon. Now the rest of America has to deal with it in addition to the abject failure that is PPACA which ballooned US healthcare costs (not that Republicans have any alternative solutions or the desire to fix it).

Dang are we back to the years of the "Thanks Obama" I guess we truly live at the end of history and have no option but to rehash the classics, don't we ?

Sorry for the political comment but every time I see Tesla financials I think “this company should’ve failed in 2014 but-for those subsidies and ill-conceived carbon credits.”

And the only reason most domestic airlines, car manufacturers, and some of the largest financial institutions still exist is because of multiple bailouts. It's not like Tesla is unique in being helped by the government.

Indeed. If the government makes a habit of bailing out all the failures, eventually the system will be dominated by failures because they never get cleaned out.

Still doesn't imply that bailing out failures was a good idea though.

I'll stop "thanking" Obama for the ACA when health premiums go back to something sensible. But honestly I liked everything else about him.

ACA was not intended to address costs. It was a compromise to expand access without threatening the insurance industry. A more comprehensive reform had just failed.

Let's think a lot more widely here: how many things in your life suddently got explosively more expensive over a decade. How many of those do you think would have not surged if it wasn't for [insert single thing here]?

It's the same logic people use to suppress minimum wage. But prices keep going up. Almost like that's not as big a factor as we thought.

How many other things in my life suddenly doubled in price within a couple of years? Can't think of any.

I know prices of everything tend to double every 10-20 years, but that's what happens when you double the money supply every 10 years.

Obama didn't make the Grifter, the grifter has a long history of grifting.

In 2024 Tesla sold more cars than Audi, employs 120 thousand people and accumulated $30 billion of cash from yearly cash flow.

But yeah, the guy that runs that company is a grifter.

how many did he lay off in 2024? How many recalls did they have? How much did he spend to buy the election?

if all you care about is raw numbers, you'll fall for the grift everytime.

They only do so much because the Nazi-grifter is focused on the latest grift

Also, under Obama SpaceX got it's first big contracts from NASA, without which SpaceX wouldn't exist today. That was a risky bet then, but the government got a really good return on that investment.

up until I read how elon made his money - no majority of it didn't come from paypal or zip2. but from gvt contracts or loans.

that's when I learned I'm playing the wrong game by trying to provide private services instead of targeting gvt.

Isn't PayPal where he got the startup capital for Tesla and SpaceX?

Yeah, he made his first big money from PayPal (I think around $300M), and then invested most of that money in SpaceX and Tesla, and that's how he became a billionaire.

180m after taxes -> 100m to spacex / 70m to tesla / 10m to solarcity.

remember before the gvt pumped money into his companies they were on the brink of bankruptcy. once they got the nasa contract spacex immediately got profitable. which allowed musk to use spacex money to loan to tesla. n also use the govt loan to tesla to make the save the company.

gist of the story - the money is in gvt. same applies to thiel.

Well his first startup capital would be from his parents that own diamond (blood, not synthetic) mines in South Africa. That's how he and his brother started Zip2. That got bought out and left Musk with an extra $22 million. He then started x.com which, by all accounts of people who worked there, was a total failure. In all ways but one: they were the first federally insured online bank. That's why Confinity (which owned PayPal) bought x.com (and then killed it. Because they only wanted the legal benefits not the product itself). That's when Musk truly became rich

But you're right that government contracts are the way you truly get rich. A lot of people don't realize California's biggest export is airplanes and airplane parts (a business run on gov't contracts) not Silicon Valley. All of Musk's ventures (Tesla, SpaceX, Boring, solar, etc) rely on heavy subsidization/contracts with gov'ts. All of his ventures are some of the most heavily subsidized companies in the US[0] and he's been sued in several countries over subsidy fraud

[0] https://subsidytracker.goodjobsfirst.org/parent/tesla-inc

> so many solar and other “clean” energy private ventures failed during that period

You can't even see you contradict yourself.

If all companies were supported by Obama but they all failed, but not Tesla, it wasn't Obama who made companies succeed but Musk who made Tesla succeed.

Not to mention you fail to enumerate those supposed subsidies.

The only significant think I know about is $465 million LOAN in 2010, which Tesla quickly and fully paid off.

Compare that to $13.4 billion loan to GM in 2008 from Bush and additional $50 billion in 2009 to bail them out from bankruptcy.

The Government (i.e. tax payers) lost $10 billion.

GM would surely not exist if not for the tens of billions of loans.

Musk would probably find a way to make Tesla work even without the $465 million loan.

I hope you see how biased your take is.

You harp on Tesla benefiting from gov support while ignoring that many other companies also get support and direct competitors like GM got 20x more support.

>it in addition to the abject failure that is PPACA which ballooned US healthcare costs (not that Republicans have any alternative solutions or the desire to fix it)

quite an understatement: they broke it whlie Obama was still in office.

regardless, the idea was good but good ideas always have bad actors. It's easy to forget that Musk of 2008 had a very different image compared to Musk of today.

Sounds like this is the result of "accelerated depreciation." As far as I can tell, that's a strategy that ultimately allows you to pay less tax one year and more tax in a later year. I don't have a strong feeling on the value of that particular tax law, but it seems somewhat less nefarious than the implied "not paying taxes at all."

I'm guessing in a different year the rate will be much lower: afterall, he gave away $1 million a day to a random registered republican voter in a key swing state to get around laws that prevent buying votes and paying people to register to vote.

That was with his money (you know richest person on the planet) and had nothing to do with Tesla.

I won’t argue it was with his own money, but everything a CEO does affects the company.

Ah I forgot his money has nothing to do with tesla and he doesn't run tesla or have a huge stake in it. And he in no way benefits from how future tax changes affect them, right?

Not an accountant but this is my understanding as well

Same amount of money now is worth more than in future

I think the quiet part here is

1. Companies see downwinds of a recession, so they want to wait for good times to do anything. Actually grow, pay off debts, make lateral moves.

2. companies were banking on administration changes to help bailed them out. So far, they seem to have won that gamble.

so there's general truth and then there's speculation about used to influence decisions.

I think this is a tax avoidance strategy that may save a lot on taxes. E.g. use accelerated depreciation to avoid taxes in a really profitable year and then if you have a loss or much lower profit in a subsequent year, you have successfully avoided a bunch of taxes. Not an accountant or tax lawyer so there may be a catch here.

That makes no sense, the integral of the tax credit is always the total value of the asset so it doesn't matter unless there are relevant tax brackets here? Businesses can also carryforward losses right?

> use accelerated depreciation to avoid taxes in a really profitable year

Tesla's earning calls tell me he should have just paid the taxes this year, in that case. Welp, hindsight.

Others have pointed out the strategy allows for picking the best year to pay taxes and therefore avoiding a lot of taxes. I'd add to that argument that the current administration is likely to create exceptionally favorable policies for Tesla specifically so they really should burn every trick now since they are about to get a whole new bag of them. I can just see it now, legislation built for Tesla. Of course it will be named something like Save The Children Clean Air Tax Credit Act but it will apply to Tesla almost exclusively as a way to plow money towards loyalist.

That only works if you have a time machine or a crystal ball.

When those decisions were made, Tesla's CFO didn't know who'll win the election.

Trump will likely cancel the $7.5k EV credit so I don't see the "policies favorable to Tesla".

Trump was campaigning on renewing his previous corporate tax cuts and making more tax cuts. It's not a secret and not specific to Tesla.

I may be wrong, but I understand this is because the company invests all of its income into its business - which means more jobs, work for other companies, and so on.

I think it better money goes into the economy, in a reasonably efficient way, rather than being taken by the State, and used in an unreasonably inefficient way.

According to the article, you are wrong.

Its due to carry forward of net operating losses from previous years, stock compensation deductions, and other depreciations and deductions.

Neoliberalism runs deep with this comment.

This is a neoliberalist forum. All startup ecosystem is a neoliberal concept.

In the past, they used another technique as well, they used corporate money to buy Dogecoin (and some Bitcoin too) to justify investments.

Not in a small amount, we talk about more than 1B USD.

https://techcrunch.com/2022/07/20/elon-musk-discloses-that-t...

From a tax perspective, they are spending to acquire assets, which is very convenient.

Not all spending is tax-deductible, I believe that only expenses are generally 100% tax deductible on day one.

Buying dogecoin or any crypto, security or asset can not be deducted though. Losses can be deducted, and the depretiation of various assets can be deducted, but the purchase itself isn't considered an expense and can't be deducted.

Otherwise all companies would just buy gold with their profits and never pay taxes.

Buying Bitcoin doesn't reduce taxes. It's no different than investing company's cash into a different currency or bonds.

In fact, when Tesla bought Bitcoin accounting rules for Bitcoin were very unfavorable in that the bitcoin wasn't valued at the price in a given quarter but, and it's hard to believe, only at the lowest ever price. So on paper the company could only loose money by holding Bitcoin.

That idiotic rule was part of Democrat's lawfare against Bitcoin.

This accounting rule was changed recently.

Also, Tesla never bought Dodgecoin. That Techcrunch article is just wrong.

Doesn't net income already take into account these sorts of costs? I thought it was after R&D and construction investments and things

Edit: I legitimately don't know (and am a bit confused as to the exact thing the article calls income). I just know as often an R&D expense I think my salary is taken out before net income

Or less jobs if they're investing in automation. Tesla likes h1b so it's not like most good jobs go to Americans anyway.

No. If Tesla (and the other companies mentioned) were investing all of this money into the business, then it would not be showing up as profits. Company taxes are not like individual taxes where only income is considered, and spending (mostly) disregarded.

Depending on which line on the income statement this is about, it is either money that could be sent to shareholders as dividends or buybacks, or money going into the cash reserves of the company.

And you are pushing a lot of opinion on the "unreasonably inefficient way". Governments are often very efficient spenders when you look at outcomes, often making private industries look awful. Medicare is a great example. It has a expense ratio of about %1.3, whereas the estimate for the Medicare Advantage plans (where they get to play games about who they let in) is that most of those private companies have an expense ratio of about %17. Private insurers are generally a bit better, usually at about %8.

To put more of a point on this, in the Affordable Care Act it was felt necessary to put a cap on the expense ratio of private insurers at %20 (%15 for large providers). That right there defines the "unreasonably inefficient way" we should be talking about.

I am not arguing that there is no waste in government, that would be silly. But the notion that government spending is generally a waste is not supported by the facts, and is more of a religious statement.

It is especially absurd though when you have a business that depends on ROADS.

As if the roads just pay for themselves.

In my state, many of the new roads being built do in fact pay for themselves via tolls. I expect that model of financing to get much more common now that computers are able to automatically read your license plate and issue the toll.

Tolls are an easy way to make sure roads are worse for everyone. privatizing roads is like, the top 5 worst things to privatize.

Profit means it wasn't reinvested. May be later, or not.

>which means more jobs

Not in this case: https://electrek.co/2024/12/30/tesla-replaced-laid-off-us-wo...

Pretty sure that wasn't even the only layoff this year.

> Sharon Zhang is a news writer at Truthout covering politics, climate and labor.

In other words, no experience with how corporate taxes work.

If 0% is how they work, then they don't work.

How much in taxes should you pay on a loss?

Is this a trick question about Hollywood accounting?

It isn't Hollywood accounting, it is just that Tesla isn't very profitable once the proper accounting is done. If you tax profits and companies don't have a lot of them then they won't pay taxes. Particularly if the government puts tax incentives in place to encourage people to go in to solar and EVs.

I guess that explains why Elon is so poor and the company is valued at practically nothing compare to all other automakers.

I urge you to check out the valuation of $Fartcoin.

The value of an speculative item is not linked to it's yield.

Valuation != profits. Tesla's profits do not explain Musk's wealth, people have been pointing out for years that the valuations of companies like Tesla make little sense. There was a long stretch of many years where they were bleeding red ink like crazy with not much to show for it.

The tax system works on accounting reality, not the opinions of stock traders.

But it _is_ profit, just without directly paying it out.

But that's the thing, if I take my entire salary and lose it gambling I still owe the government taxes.

I the person am taxed on revenue.

If instead I have a corporation handle everything then I can come up with (relatively simple) systems so that I don't pay taxes and the corporation doesn't pay taxes either.

Gambling isn't considered an investment. It's consumption.

You asked:

>How much in taxes should you pay on a loss?

It was implied that the loss here was defined as difference between corporate revenues and expenses.

This concept doesn't apply to personal income taxes and gambling losses.

yes yes, different rules for the rich than the working class.

That is true, but not just.

Investment is a form of gambling.

Plenty of people experience a net loss after paying for the goods, services, and amenities required to keep themselves and their families alive.

What if they pay more taxes in the future by using a system for paying less take this time?

There is no future, only today, short terms results

That's seems like a claim not root in an understanding of how businesses work.

If a company invest $3B to become profitable, it seem entirely logical that they can use those expenses to offset any future profit.

If you don't don't do that, companies that require large investments to become profitable simply won't exist.

Taxes are part of politics

Can a private citizen do the same things that companies do? People reinvest in themselves too.

They can, it's just that most people don't have the savvy to pull it off.

Yes if you have business income. In fact it's common.

If you're using business income to invest in yourself as an individual, that's pretty illegal where I live. Maybe it's different where you are.

The extent to which I can invest in myself is using business supplies or equipment for personal tasks here and there. Like, print some things or use some software I didn't pay taxes on.

I know some people go as far as driving their work vehicles around, but that's totally illegal both in terms of insurance and tax purposes here.

Check out Hess v Commissioner.

For certain types of businesses the individual is almost indistinguishable from the business.

To save people the trouble.

> The relevant ruling on this subject came in 1994 in a case known as Hess v. Commissioner. The plaintiff, a self-employed exotic dancer, had implants that expanded her bust size to the size 56FF. For tax purposes, she treated these as a deductible business expense on her schedule C. The IRS contested her deduction.

> ... The courts ruled in her favor:

https://taxfoundation.org/blog/how-breast-implant-size-relev...

So many comments to make about that situation.

But that aside, it seems to make sense to make the business and person the same when the business is you. No one else can truly replace that exotic FF dancer. Her clients die with her, and won't truly be replicated no matter what.

Odds are someone can be trained to do your paperwork and run your business. That may be the distinctive factor.

There is nothing I can do to engrave my body in a way that benefits by business. It’s an interesting case, but it seems to make sense. Buying a car for myself to use for my business doesn’t make sense at all; it’s actually bad for my business and creates a significant liability.

The IRS settled this question by allowing you to deduct mileage regardless of car.

Also people buy a car for a business all of the time and the IRS has very clear rules for it.

Keep in mind you're deducting your business profits-- something that didn't even exist before you.

Unfortunately in my case my small business would be 100% transferable to any other individual. But that’s a very interesting grey area.

More applicable might be training, courses, certification etc (where you can clearly demonstrate a business purpose related to your current line of work).

Not legally.

Sure, especially if they own a corporation. My wife’s business was a net loss for a couple of years during COVID. We scrounged by on my salary so she could keep her employees and not close down for good. It got better, but our net income was negative even though we had what looked like a decent chunk of revenue. I’m glad we were taxed on net, not gross.

They were asking about private citizens, not corporations. Your wife isn't a corporation, is she?

Dude should've wifed Google

Why pay taxes when you can just buy the Whitehouse? It's so much cheaper.

The tax rules used by Tesla in 2024 were applicable to all companies and if Democrats wanted different rules, they could have changed in 2020-2023.

But why make sense when you can opine. It's so much easier.

Did every CEO actively campaign for the current president? I'm curious tho were you upset when the "twitter files" were released and found out that the Biden campaign asked for hunter's dick pics to be removed?

I’m still shocked that Tesla income is just 2.3B, compared to like, Meta who reports 62.3B net income. I didn’t realize how tiny Tesla is for the amount of media attention and stock valuation they have. Even amongst automakers they are tiny. Toyota had like 32B net income.

You're in for quite a surprise if you thought Tesla is remotely comparable to other Big 7 companies.

Tesla is barely profitable at all, and if Trump ends EVs subsides Tesla will be severely bleeding money.

It's the quintesential meme stock.

Where did you get that Meta number from? Meta's revenue for the last quarter was 48.38B, and net income is 20.84B (and it was less in previous quarters). Tesla revenue was 25.71B. Revenue is better in comparing how "big" a company is, but it's kinda apples to oranges comparison when one company is making physical products, while the other operates websites and other services (Tesla has nearly two times more employees, for example). For Toyota I see $12.5B net income and $152.2B revenue for Q3 2024 (dwarfing Tesla). I agree that Tesla valuation is completely disconnected from its revenue and income.

EDIT: I guess that your Meta income number is yearly and it checks out. The article says that Tesla "reported $2.3 billion in income" but I think they got that number for the last quarter, because even in the SEC document linked in the article[0], page 49, I see $7B net income, the same number as in their earnings release[1]. But the SEC document also lists $1.8B taxes for the year 2024, so that seems to contradict the headline of the article, but they're talking only about US federal taxes, I guess most of these taxes is non-US or state.

EDIT2: Yes, on page 81 it's listed that they paid 0 federal taxes, $45M state taxes, and $1.3B foreign taxes. $2.3B in income for whole 2024 is US only, $7B is global.

[0] https://www.sec.gov/Archives/edgar/data/1318605/000162828025...

[1] https://digitalassets.tesla.com/tesla-contents/image/upload/...

Ran this article through a news bias customGPT and then through Deep Research (https://chatgpt.com/share/67a68e7b-5df4-8006-8da8-d76f11c2f1...)

These topics always remind me of this Dave Chappelle skit.

The system IS rigged, and everyone knows it. https://www.youtube.com/shorts/lNi9DIVkXpo?feature=share

Are we still doing this in 2025? The same complaints were brought up about Amazon years ago. Companies can have no income tax liability based on the tax credits they get (for R&D or numerous other possible reasons), the way they depreciate assets, how their profits and losses are managed from an accounting perspective, etc. It doesn’t mean there is anything wrong happening. In fact it probably means the right thing is happening - companies typically are able to lower tax liability by doing things we incentivize them to do.

Only the W2 losers are paying taxes.

Dupe: https://news.ycombinator.com/item?id=42885688

How much of that "income" is attributable to government subsidies (for EVs, solar)?! Lol.

A Single Tax regime aka the Land Value Tax would make these articles a thing of the past.

We could solve the deficit, pay down our debts and many people would pay less in taxes, if we eliminated all taxes and replaced them with a Land Value Tax.

So if I were a trillionaire with a reasonable home, I’d pay the same taxes as my neighbor? Sign me up!

You would only be taxed based on your land use so yes. Labor and Capital would not be taxed only Land.

That sounds like a terrible idea.

It’s a radical idea but with there being 1.4 billion acres of private property in the United States, at an average of $10,000 per acre for a Land Value Tax would raise 14 Trillion. Divided between the States and Federal Government, that would cover the 6.75 Trillion Dollar budget including the over 700 Billion Dollar deficit. With one single Tax that for many people would be a massive tax cut. We would balance the budget and could begin paying down the debt.

How is that a terrible idea?

Pretty sure that would immediately put every farmer out of business.

I did say average. Land in the middle of nowhere Nebraska is already dirt cheap compared to land in downtown Manhattan and agriculture is a productive use of the land. A Land Value Tax ideally targets the unimproved value of land. Farming would reduce the unimproved value and lower the tax burden.

It would be the McMansions in suburbs that would be more onerously taxed if anything.

Sounds a lot like you want to drive "The Poors" out of the city, because that would be how you'd do it.

An average of 10,000 dollars per acre, when multi-family houses and apartments fit several families, if not dozens or hundreds into a single acre, aka how high density and efficient land use in cities work, they would pay little if nothing in a LVT and have no income tax. It’s people who have several acres in high value areas or hundreds of acres not being used for productive agriculture, the Rich, who would pay millions in taxes.

If an acre of land in New York City was 1 million dollars per year with a LVT, a high rise apartment with 100 units would have people paying 10,000 per year for their share. That would be a tax cut for many people.

Yes, grandma in the Bay Area in a massive McMansion on a fixed income would be displaced but that land use was inefficient and they were not paying their share of property taxes today under our current system anyway thanks to California property taxes.

Hmm I have an idea for how DOGE can raise more revenue...

By raising taxes, such as tariffs.

trump spreads his income perfectly across all his LLCs. Their expenses always exactly match their income to the penny. I wonder why he is able to do that?

The d

This will be the downfall of the USA. With the government filling up with grifters, the people and companies who still pay up will feel like losers.

Yep. Paying taxes is the right thing to do for the country. Yet the system gets purposely broken, people lose faith that any system could work, tax dollars run for the shadows, and the cycle accelerates. I don’t know what the fix is. We need to restore faith, but you need revenue to build faith, and revenue depends on established faith.

I'm not sure it's the de facto right thing to do. Recall that the USA didn't tax income until 1913, relying primarily on tariffs and excise taxes to fund the federal government. And yet, the country was doing just fine before that—expanding its infrastructure, winning wars, and growing its economy.

The introduction of income tax fundamentally changed the size and scope of government. With the current size of federal spending, much of it driven by entitlement programs, defense, and interest on debt, there is plenty of room to trim the fat. Bureaucracy, inefficiencies, and bloated administrative costs are all ripe for re-evaluation and the axe.

"Doing just fine before that" is an interesting interpretation of history.

The problem was low average productivity naturally leading to low average consumption. The problem was not low taxation.

Many of our modern conveniences and improvements are the direct result of public investments made possible through taxation. Without this funding, the level of development and quality of life we enjoy today might not have been achievable.

If you prefer living in 1913, you're a hopeless romantic.

And most are not. I repeat that the problem back then was a low average productivity and not insufficient taxation.

The USA started taxing income in the Civil War in 1861.

There were of course lots of other taxes being levied in the USA, poll taxes, property taxes, but the money went to state government rather than federal.

> Advocates for fairer taxation have said that, due to the way that tax law is written and enforced, it is essentially optional for Musk and other billionaires to follow tax guidelines

What kind of bullshit is this? If Musk didn't follow the "guidelines" (i.e. laws, there are no "guidelines" when taxes are concerned, there are laws), why won't you point out where he doesn't and provide evidence? If he does follow the laws, but you don't like what these laws allow him to do (which is a legitimate opinion, of course), then don't tell "it's optional for him to follow tax guidelines" - he follows the guidelines, that is, laws, it's just that the laws, in your opinion, need to be changed. Don't vaguely accuse people in being criminals without any evidence of any crime.

Then in the ending blurb they are vaguely implying Trump is somehow threatening their lives, without again providing any evidence. I suspect this source is not at all trustworthy and is worried more about raising money on sensationalized clickbait than informing people.

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