Why does Elon Musk support Trump? Tax evasion

The tax debate in Congress in 2021 has put Musk in a difficult position from a tax perspective. He had options to buy additional shares of Tesla that expired in 2022. The exercise price of these options was a fraction of Tesla’s current trading price. A billionaire in Musk’s shoes would typically wait to exercise those options—and reap the huge windfall—until the options expire.

But by then, in 2022, the House-passed 8 percent income tax on income exceeding $25 million could become law. If Musk waits until 2022 to exercise his options, his windfall could face a huge new tax liability.

This reality meant that Musk had no rational alternative but to exercise his options in the fall of 2021, before the new income tax went into effect, resulting in him having to pay $11 billion in federal income taxes for the year.

So Musk did just that and tried to use the result to burnish his public image. He allegedly left the decision on whether he should sell 10 percent of his stake in Tesla to his Twitter followers. And he used his 2021 tax bill to win a Twitter war with lawmakers like Sen. Elizabeth Warren, who pointed out how little Musk paid in federal taxes in previous years. In 2018, as ProPublica Musk reportedly paid no federal income taxes as he watched his wealth increase by billions.

Musk didn’t just expose his 2021 tax payments to the court of public opinion. He also began criticizing Senator Wyden’s proposal to tax billionaires’ investment profits, warning his Twitter followers that once politicians run out of the tax dollars they collect from him and his fellow billionaires, they will “come for you.”

The federal government, Musk complained, was simply spending too much money. If he paid less in taxes, Musk said, he would “use that money to take humanity to Mars.” This promise could explain Musk’s recent assertion that humanity will never reach Mars without Trump, as well as his tax cuts for billionaires.

In January 2022, after selling Tesla shares, Musk began accumulating shares in Twitter, the social network most associated with politics and public opinion. By April 2022, he became Twitter’s largest shareholder, owning more than 9 percent of the company’s shares. That same month, he offered to buy Twitter outright at $54.20 per share. In October 2022, he closed the deal to buy Twitter.

Even last spring, when he bought Twitter, Musk and his followers used the platform to argue that SpaceX and Tesla would never have survived if Biden’s proposal for a minimum income tax on billionaires had been the law of the land in 2008.

Musk also began making multimillion-dollar donations to Republican causes in 2022. These contributions have only recently become known. This included $50 million for Citizens for Sanity, a group associated with Trump adviser Stephen Miller. Citizens for Sanity used the funding to run aggressive ads against Democrats in the 2022 midterm elections.

That same year, Musk contributed to another Republican group, Building America’s Future. The exact size of these contributions remains unknown, but we do know that the group’s revenue grew by $42 million between 2021 and 2022.

2023 will bring even more political activity for Musk, most notably a $10 million contribution to Ron DeSantis’ presidential campaign.

There is simple mathematics behind these contributions. Musk prioritizes accumulating wealth above all else and has a deep disdain for paying taxes.

By early 2022, Musk began to view the Democratic Party as a direct threat to his continued favorable tax treatment and the future of his vast fortune. The House of Representatives passed an 8 percent income tax on huge incomes. The Senate had a bill before it to close the billionaire buy-borrow-die loophole. In response, Musk will use his wealth and Twitter to turn public opinion against the Democratic Party and its tax proposals, as well as to help Republican candidates in the election battle.

In other words, Musk has begun to follow the practices of most of his fellow billionaires. Like them, he continued to donate big money to Trump and other Republicans.

These billionaires, as always, put themselves above the country. Like their German counterparts in the 1930s, their lust for wealth blinds them. Their penchant for accumulating wealth surpasses any other course. We need to confront them now more than ever.