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.
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.
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.
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
> 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.
> 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.
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.
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.
> 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.
erulabs|1 year ago
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.
ryandrake|1 year ago
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.
jldugger|1 year ago
Is this controversial?
iforgot22|1 year ago
unknown|1 year ago
[deleted]
unknown|1 year ago
[deleted]
johnnyanmac|1 year ago
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).
etchalon|1 year ago
[deleted]
Dylan16807|1 year ago
$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.
wongarsu|1 year ago
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
9283409232|1 year ago
aidenn0|1 year ago
This is specifically corporate income taxes.
tzs|1 year ago
Aurornis|1 year ago
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.
tzs|1 year ago
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.
iforgot22|1 year ago
unknown|1 year ago
[deleted]
greenavocado|1 year ago
[deleted]
erulabs|1 year ago
I value reinvestment, but now you’ve insulted a potential ally. What good does this do your cause?
moogly|1 year ago
No, that would be a big pile of Bitcoin[1], actually
[1]: https://fortune.com/2025/01/30/tesla-profits-bitcoin-crypto-...
knubie|1 year ago
[0] https://www.npr.org/sections/money/2012/10/18/163106924/a-ta...
DanHulton|1 year ago
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.
whymauri|1 year ago
But corporations are people..? Can't have it both ways right :/
Unless I'm missing something here.
johnnyanmac|1 year ago
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.
iforgot22|1 year ago