Senator Elizabeth Warren has accused Elon Musk’s SpaceX of benefiting from billions of dollars in US government contracts while paying little to no federal taxes. Warren took to social media to express her concerns, stating that SpaceX is worth over $350 billion after receiving billions in government contracts, but could be paying less in taxes than the average citizen.
Tax Loopholes and Corporate Handouts
Warren blames the tax reforms implemented by former President Donald Trump, which she claims have “rigged the tax code with loopholes for billionaire corporations.” She demands an end to corporate handouts and calls for comprehensive tax reform to address excessive loopholes. According to Warren, the current tax code allows companies like SpaceX to avoid paying their fair share of taxes, despite benefiting from government contracts and subsidies.
SpaceX’s Tax Strategy
A recent report revealed that SpaceX has avoided paying federal income tax on about $5 billion in taxable income since its founding in 2002. The company has used a legal tax strategy known as a net operating loss carryforward, which allows companies to offset future income with earlier losses. This provision was expanded indefinitely under Trump in 2017.
Elon Musk’s Defense
Elon Musk has previously defended his company’s tax strategy, stating that Tesla legally carried forward past losses under IRS provisions. However, Warren’s criticism of SpaceX’s tax practices has sparked a wider debate about corporate tax evasion and the need for comprehensive tax reform.
SpaceX’s Revenue and Taxes
Despite its booming business, SpaceX paid only minimal taxes in 2021, including $483,000 to foreign governments and $78,000 in state taxes. The company’s revenue is expected to reach $15.5 billion in 2025, double the $7.4 billion reported in 2023. Its satellite internet service, Starlink, now generates more revenue than its rocket division, with 2.5 million users and $8 billion in 2023 sales.
Warren’s Broader Criticism of Musk
Warren has previously targeted Musk over conflicts of interest and misuse of government influence. She has released a report alleging over 100 abuses of power during Musk’s time as a Trump administration adviser. Additionally, she has criticized the Pentagon for awarding Musk’s AI startup, xAI, a $200 million contract despite concerns over the company’s chatbot, Grok, making antisemitic remarks.
Conclusion
The controversy surrounding SpaceX’s tax practices has sparked a wider debate about corporate tax evasion and the need for comprehensive tax reform. As Senator Warren continues to criticize Musk and his companies, the issue is likely to remain in the spotlight, with many calling for greater transparency and accountability in corporate taxation.