9 ms·
Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income
- humanbee 2y agoRan this article through a news bias customGPT and then through Deep Research (https://chatgpt.com/share/67a68e7b-5df4-8006-8da8-d76f11c2f180 https://chatgpt.com/share/67a68e7b-5df4-8006-8da8-d76f11c2f1...)
- spiderfarmer 2y agoThis 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.
- btmiller 2y agoYep. 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.
- normalaccess 2y agoI'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.
- etchalon 2y ago"Doing just fine before that" is an interesting interpretation of history.
- peterfirefly 2y agoThe problem was low average productivity naturally leading to low average consumption. The problem was not low taxation.
- spiderfarmer 2y agoMany 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.
- peterfirefly 2y agoAnd most are not. I repeat that the problem back then was a low average productivity and not insufficient taxation.
- deleted 2y ago[deleted]
- jimnotgym 2y agoThe 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.
- casenmgreen 2y agoI 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.
- davidt84 2y agoAccording to the article, you are wrong.
- deleted 2y ago[deleted]
- yzydserd 2y agoIts due to carry forward of net operating losses from previous years, stock compensation deductions, and other depreciations and deductions.
- xyst 2y agoNeoliberalism runs deep with this comment.
- okanat 2y agoThis is a neoliberalist forum. All startup ecosystem is a neoliberal concept.
- rvnx 2y agoIn 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-tesla-owns-dogecoin-but-how-much-does-it-have/ 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.
- erulabs 2y ago> "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!
- ssklash 2y agoIn what world is a massively profitable company paying almost nothing in taxes polarizing?
- 9283409232 2y agoMany people on this very website support large companies not paying taxes.
- erulabs 2y agoYou 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.
- jldugger 2y ago> 4. Journalism is in a battle with the current administration Is this controversial?
- deleted 2y ago[deleted]
- chrislongss 2y ago
- fishtoaster 2y agoSounds 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."
- cma 2y agoI'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.
- bradac56 2y agoThat was with his money (you know richest person on the planet) and had nothing to do with Tesla.
- nativeit 2y agoI won’t argue it was with his own money, but everything a CEO does affects the company.
- cma 2y agoAh 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?
- bradac56 2y ago[flagged]
- hatthew 2y agoNot an accountant but this is my understanding as well
- 2y ago
- SeanAnderson 2y agoI 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.
- hatthew 2y agoI 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.
- SeanAnderson 2y agoThat 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.
- andreygrehov 2y ago> Sharon Zhang is a news writer at Truthout covering politics, climate and labor. In other words, no experience with how corporate taxes work.
- snypher 2y agoIf 0% is how they work, then they don't work.
- linksnapzz 2y agoHow much in taxes should you pay on a loss?
- sangnoir 2y agoIs this a trick question about Hollywood accounting?
- roenxi 2y agoIt 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.
- cozzyd 2y agoHmm I have an idea for how DOGE can raise more revenue...
- analog31 2y agoBy raising taxes, such as tariffs.
- blackeyeblitzar 2y agoAre 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.
- lvl155 2y agoYou 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).
- TheGamerUncle 2y agoDang 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 ?
- lvl155 2y agoSorry 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.”
- OnlineGladiator 2y agoAnd 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.
- roenxi 2y agoIndeed. 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.
- deleted 2y ago[deleted]
- 2y ago
- wnevets 2y agoWhy pay taxes when you can just buy the Whitehouse? It's so much cheaper.
- kjksf 2y agoThe 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.
- wnevets 2y agoDid 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?
- _uxvx 2y ago[flagged]
- spiderfarmer 2y agoOr HN is also used by people from the EU who feel paying taxes is necessary for a functioning society.
- vtashkov 2y agoOr I am from the EU and I don't see many of you coming here to live your nice life with big taxes, 2 months queues for doctor appointment, 3 bedroom appartments in the ballpark of 1 million dollars AT LEAST, while net salary around $5k per month.
- spiderfarmer 2y agoI don’t understand your comment in the slightest.
- anon-3988 2y agoCan a private citizen do the same things that companies do? People reinvest in themselves too.
- normalaccess 2y agoThey can, it's just that most people don't have the savvy to pull it off.
- declan_roberts 2y agoYes if you have business income. In fact it's common.
- steve_adams_86 2y agoIf 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.
- xyzzy123 2y agoCheck out Hess v Commissioner. For certain types of businesses the individual is almost indistinguishable from the business.
- lesuorac 2y agoTo 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-relevant-tax-policy/ https://taxfoundation.org/blog/how-breast-implant-size-relev...
- xnx 2y agoDupe: https://news.ycombinator.com/item?id=42885688 https://news.ycombinator.com/item?id=42885688
- deleted 2y ago[deleted]
- declan_roberts 2y ago[flagged]
- idunnoman1222 2y ago[flagged]
- kemotep 2y agoA 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.
- kstrauser 2y agoSo if I were a trillionaire with a reasonable home, I’d pay the same taxes as my neighbor? Sign me up!
- kemotep 2y agoYou would only be taxed based on your land use so yes. Labor and Capital would not be taxed only Land.
- kstrauser 2y agoThat sounds like a terrible idea.
- kemotep 2y agoIt’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?
- BenjiWiebe 2y agoPretty sure that would immediately put every farmer out of business.
- 2y ago
- normalaccess 2y agoThese 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 https://www.youtube.com/shorts/lNi9DIVkXpo?feature=share
- swframe2 2y agotrump 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?
- deleted 2y ago[deleted]
- holyknight 2y ago[flagged]
- deleted 2y ago[deleted]
- lotsofpulp 2y agoThe d
- icameron 2y agoI’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.
- TheAlchemist 2y agoYou'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.
- oskarkk 2y agoWhere 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/1318605/000162828025003063/tsla-20241231.htm https://www.sec.gov/Archives/edgar/data/1318605/000162828025... [1] https://digitalassets.tesla.com/tesla-contents/image/upload/IR/TSLA-Q4-2024-Update.pdf https://digitalassets.tesla.com/tesla-contents/image/upload/...
- whatever1 2y agoOnly the W2 losers are paying taxes.
- waltercool 2y ago[dead]
- morpheos137 2y agoHow much of that "income" is attributable to government subsidies (for EVs, solar)?! Lol.
- smsm42 2y ago> 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.