The Biden Administration is working hard to pass legislation that aims to help Americans. Our infrastructure is a disaster, many families are struggling financially, the rich are getting richer, and climate change is upon us.
For the above reasons, some people might be outright disgusted (ask Bernie Sanders and Robert Reich) that Tesla CEO Elon Musk – the richest man on the planet – has made comments about paying taxes, and now he says it might actually be better if Biden's Build Back Better bill doesn't pass. In fact, he's encouraging the Senate to vote it down, though he's not against improving infrastructure.
Bills like the recently passed infrastructure legislation and the Build Back Better plan are packed with all sorts of details, many of which politicians on both sides of the aisle will admit are often to the point of ridiculous. While the intention of the Build Back Better bill seems to be to help US citizens in many ways, the part about new EV tax credits has rubbed many people the wrong way.
Musk has always said he doesn't support subsidies since they make for an uneven playing field. Ever since Tesla sold 200,000 electric cars and its vehicles became ineligible for the current $7,500 federal EV tax credit, Tesla has found incredible success. This is all despite the fact that all rivals, aside from GM, still get the credit, and oil and gas enjoy an obnoxious level of subsidies.
If the bill passes as advertised, Tesla buyers could once again get a $7,500 tax credit on the purchase of an electric car. However, some competing automakers may get a credit of up to $12,500 since they're unionized. Once again, an uneven playing field.
While other automakers that are just beginning to produce compelling EVs may need the credit to attract more buyers, Tesla clearly has an almost unmanageable demand issue, and it has been raising prices to curb demand.
Musk explained during the recent Wall Street Journal's CEO Council Summit via Teslarati:
“It’s worth noting that the (electric) vehicle purchase tax credit, the $7500, Tesla stopped getting that two years ago. Whereas everyone else except for GM gets the $7500 tax credit. So all of our sales this year and last year had nothing to do with the tax credit because we’re no longer eligible because we’ve made so many electric cars. Tesla’s made roughly two-thirds of all the electric cars made in the United States. I’m not sure if most people are aware of that. So Tesla’s made roughly twice as many electric vehicles as everyone else has made. Honestly, I would just can this whole bill. Don’t pass it. That’s my recommendation."
Musk went on to say that the US federal budget deficit is insance. He suggested that the government work on its spending rather than adding more subsidies. Musk continued:
“We spend so much money. The federal budget deficit is insane. You know, it’s like $3 trillion, federal expenditures are $7 trillion, federal revenue is $4 trillion. That’s a $3 trillion difference. If this a company, it will be a $3 trillion loss. I don’t know if we should be adding to that loss. That seems pretty crazy. Something’s gotta give. You can’t just spend $3 trillion more than you own every year and don’t expect something bad to happen. You know, this is not good."
As far as infrastructure is concerned, Musk believes that government should invest in the future. He's not against improving infrastructure. More specifically, he said the administration should be looking into how it can move forward with new infrastructure to reduce traffic congestion. He also said he thinks the US could have better airports and highways, but we also need more tunnels, "double-deckers for highways," etc.
It seems Musk is putting in a plug here for The Boring Company here. However, some will suggest he's right. Our government has a tendency to "fix" systems that are old and broken, and they'll remain "broken" systems as a whole even after they're repaired and updated. Taking a step back and looking at what might actually be a better option going forward may be the wiser choice. Perhaps not Build Back Better, but Build It Forward, or something along those lines?