Elon Musk’s SpaceX makes money burn up faster than his rockets

The New York Times obtained its mittens on certain confidential documents showing that Elon Musk’s private spacex had probably paid little or no income tax since its creation in 2002. And the company even secretly says to investors that it might never have to pay. All of this is part of the joy of how the American tax system supports ultra-rare, especially when they are bad in business.

Here is How does it work. SpaceX has accumulated more than $ 5 billion in losses by the end of 2021. There was an existing tax advantage which allowed companies to compensate for future taxable taxable income, then Trump’s tax changes in 2017 eliminated the expiration date of the advantage. Now SpaceX is able to apply nearly $ 3 billion in losses against this future taxable income indefinitely.

It is always known that SpaceX obtains billions of federal contracts, but because the company is in private, no one knew which part of its profits is based on these contracts. Times noted that in 2020, these contracts generated $ 1.4 billion, or almost 84%, of the company’s total turnover. In 2021, federal contracts represented $ 1.7 billion in income, or 76% of the total.

It’s a sweet enough affair for SpaceX and for Musk, who owner About 42% of the company. Meanwhile, taxpayers get a double charge. Billions of your taxes go to contract For SpaceX, which can then avoid paying taxes. Meanwhile, NASA, the government institution with a rich and successful tradition of spatial exploration, sees both its endowing And funding decimated.

With the enormous dependence of dollars of federal contracts, it is doubtful that SpaceX would continue to exist without counting on government documents. And let’s not forget that the company obtains other advantages of the government, such as Texas which works at Scanning The company therefore does not have to spend money to follow environmental rules.

Musk also has a similar sweet well-being agreement in his company of electric vehicles. Tesla Make a lot of money via the sale of tax credits. As part of a government program intended to encourage car manufacturers to build low or zero emission cars, Tesla wins this tax credit by manufacturing electric vehicles. It is then able to turn around and sell credits to other manufacturers who need carbon credits to comply with climate regulations. Over the past decade, Tesla has achieved $ 10.7 billion thanks to this process, representing about a third of its profits during this period. In the first quarter of 2025, Tesla would apparently have published a loss But for credits.

Musk and its companies are not the only ones to play the tax system. All reminds Trump’s ability To avoid income taxes because it is zero for business management. For eight years out of 10, from 1985 to 1994, Trump could not pay any federal income tax because he lost as much money. His 1995 deposits showed a loss $ 916 millionA sum so important that the experts told the New York Times that Trump could have avoided taxes up to 18 years old.

Trump obtained this advantage in a way similar to that of Musk: the tax code has a giant escape where business owners can use their losses to compensate for taxes on future income.

We are forced to treat people like Trump and Musk as if they were commercial geniuses and creators of wealth and jobs. Instead, these are people who are bad to keep their businesses and themselves afloat in the absence of government documents. It is nothing other than capitalism for gains, socialism for losses. We all support the burden of subsidizing their crazy commercial models, but they get all the advantages and the benefits.