It seems we could write all day about the news that’s come from Tesla CEO Elon Musk’s interview at the Wall Street Journal’s CEO Council Summit. Musk has a tendency to say exactly what he thinks, even it if might upset people or be taken out of context later. The CEO has strong opinions when it comes to government spending and the tax system.
Right off the bat, as soon as Musk mentioned his taxes in the past and started tweeting on the topic, people called him out. Headlines stated that the richest man in the world doesn’t want to pay taxes. However, that’s not the whole story. Since then, Musk has sold a significant amount of stock for the purpose of paying taxes, but that’s another story for a different day.
During the recent interview, Musk talked about the “billionaire tax.” He made it clear that even if all CEOs gave the government all of their money, it may not make a difference. Why? Because Musk believes the government wouldn’t necessarily know how to spend it wisely, or at least not as wisely as some billionaires are already allocating it themselves. He shared via Teslarati:
“First of all, I pay a lot of tax. My marginal tax rate is like 53%. That’s not trivial. Obviously, there’s asset-based taxes, the sales tax, and everything else. There’s also the estate tax. Generally, I think the estate tax is a good tax.”
He added that when it comes to a ridiculous level of assets, to the point that there would never be any way to appropriately spend it all, there comes a point that the excess taxing is just simple “capital allocation.” Musk continued:
“It does not make sense to take the job of capital allocation away from people who demonstrate great skill in capital allocation, and give it to an entity that has demonstrated very poor skill in capital allocation, which is the government.”
Musk called the US government a sort of corporation, the biggest of its kind. If a company does a bad job of capital allocation, it likely fails, or may at least find itself in trouble along the way. Meanwhile, the government is allowed to press on despite questionable allocation, massive debt, and even scandal. He also said the government has a “monopoly on violence,” as well as “no recalls.”
Essentially, Musk is saying that he should be able to do what he wants with his money, so long as he’s successful and he’s doing it with a good cause in mind. He can’t possibly spend the money himself, and he doesn’t even want to. However, handing it over to the government with the impression that it will do a better job of spending it on “the right” things could clearly lead to disaster, and it has in the past. What if Musk’s tax money is used to subsidize oil and gas?
At the same time, there have been many instances in our history when the government did spend our tax money responsibly and in good faith, but that may become increasingly uncommon with the current political climate and in-fighting.
Musk was also asked about President Biden’s electric car charging initiatives. Keep in mind, Tesla already has its own proprietary Supercharger network that’s often considered the best in the world, though the electric automaker could still stand to benefit from government monies allocated to charging network buildout.
Not surprisingly, since we know Musk isn’t a fan of subsidies and incentives, the CEO said the charging network subsidies aren’t necessary. According to a transcription of the WSJ interview shared by Teslarati, Musk explained:
“Unnecessary. I mean, do we need support for gas stations? So there’s no need for this support for a charging network. I’d delete it. I’m literally saying get rid of all subsidies. And also for oil and gas… Maybe (Tesla’s competitors) need it. I don’t know. But I think just generally, I’m in favor of deleting subsidies.”
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