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Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income

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Re: Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income

#21

Post by hatthew »

SeanAnderson wrote: post #8

I 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, pr…

I 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.

Re: Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income

#22

Post by Hikikomori »

casenmgreen wrote: post #3

I 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.

Or less jobs if they're investing in automation. Tesla likes h1b so it's not like most good jobs go to Americans anyway.

Re: Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income

#25

Post by jldugger »

erulabs wrote: post #15
ssklash wrote: post #9

Earlier quoted context omitted.

In what world is a massively profitable company paying almost nothing in taxes polarizing?

You 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…

> 4. Journalism is in a battle with the current administration

Is this controversial?

Re: Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income

#26

Post by shiftpgdn »

SeanAnderson wrote: post #8

I 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, pr…

[flagged]

Re: Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income

#27

Post by greenavocado »

ssklash wrote: post #9
erulabs wrote: post #4

> "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!

In what world is a massively profitable company paying almost nothing in taxes polarizing?

[flagged]

Re: Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income

#28

Post by hatthew »

fishtoaster wrote: post #6

Sounds 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."

Not an accountant but this is my understanding as well

Re: Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income

#29

Post by blackeyeblitzar »

Are 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.

Re: Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income

#30

Post by lvl155 »

You 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).
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