As Democrats balk over Tesla not paying any federal income taxes, they fail to point out that the company is using tax breaks and subsidies once championed by their own party.
Several Democratic lawmakers have claimed in recent weeks that Tesla founder Elon Musk received special treatment from President Donald Trump after it was reported that the automaker paid $0 in federal income taxes in 2024 and in 2022. Many left-wing lawmakers have continued publicly criticizing Tesla for not paying federal income taxes, including Democratic Washington Rep. Pramila Jayapal, who referred to Musk as a “greedy billionaire” in a Feb. 27 post on X.
“Do you know how much Elon Musk’s Tesla paid in federal income taxes last year? $0,” Jayapal wrote in the social media post. “It’s time for greedy billionaires to stop fear-mongering about immigrants and start paying their fair share.”
However, those same lawmakers appear to be ignoring the fact that Tesla’s low federal income taxes are largely the result of the Democratic Party’s push for Americans to transition to driving electric vehicles (EVs). While Jayapal has critiqued Musk and Tesla over the past few years, she previously campaigned for bringing down the cost of EVs and also voted in favor of the Inflation Reduction Act (IRA), which was passed by Congress along party lines in 2022 and includes provisions for EV tax credits.
The Biden-Harris administration led a massive effort to force the adoption of EVs, including introducing various energy tax credits and funneling billions of dollars towards a problem-stricken project to build a nationwide network of EV charging stations by 2030. Another piece of legislation championed by former President Joe Biden alongside the IRA, the Infrastructure Investment and Jobs Act (IIJA), earmarked billions of dollars for climate change research, grants and funding for various green energy initiatives.
The IRA created a corporate alternative minimum tax (CAMT) which imposes a 15% minimum tax on the adjusted financial statement income of certain large corporations. The CAMT generally applies to “large corporations with average annual financial statement income exceeding $1 billion,” according to the Internal Revenue Service (IRS).
Tesla is avoiding the CAMT policy through various “loopholes” in the minimum tax created by Democrats, notably for clean energy tax credits. The IRA notably includes various green energy-related credits and deductions, including clean electricity investment credits and tax credits for individuals who install qualified vehicle refueling or EV recharging property in their homes or businesses.
One of the primary reasons that Tesla pays little to no income tax each year is that it experienced net losses for several years after its founding in 2003, and companies are allowed to carry forward net operating losses to offset future tax liabilities. Additionally, Tesla was able to save $500 million in taxes in 2024 by using accelerated depreciation, a tax method for businesses which allows them to write off the costs of an asset faster than it would normally actually lose value, according to a January report from the Institute on Taxation and Economic Policy.
Under the IRA, certain new EVs qualify for a federal tax credit of up to $7,500, which many of Tesla’s customers have benefitted from.
Democratic Massachusetts Sen. Elizabeth Warren — who has previously called for strengthening the CAMT — has claimed that Musk has taken advantage of tax breaks that solely benefit billionaires. Warren sent a March 6 letter to Musk which accused him of “exploiting” his ties to Trump in order to slash billions of dollars in taxes owed by Tesla while “leaving working families to pick up the tab.”
“American taxpayers will shoulder the burden of tax cuts for Tesla, and they deserve answers about your efforts to secure massive tax breaks for billionaire corporations,” Warren wrote in the letter.
Despite this, Warren voted in favor of the IRA, and has previously promoted several of the IRA’s tax breaks and advocated for various other clean energy investments in her state.
Moreover, Trump on Jan. 20 established the Department of Government Efficiency (DOGE), led by Musk, in an attempt to eliminate fraud and wasteful spending across all federal government agencies. DOGE’s ongoing efforts to slash government waste have been met with massive opposition from Democrats.
After one of DOGE’s official X accounts asked its followers to “please DM this account with insights on finding and fixing waste, fraud and abuse” relating to the IRS in a Feb. 17 post, the Democratic House Committee on Appropriations appeared to snipe at Musk by replying to the social media post with a link to an article about Tesla paying less federal income tax than it paid their top five executives over the course of several years.
Notably, Tesla has notched a significant amount of revenue from various green energy programs backed by Democrats, including earning $10.7 billion from selling credits created by government climate programs — which accounted for a third of Tesla’s profits since 2014, Politico reported. In the first nine months of 2024, roughly 43% of Tesla’s net income came from those credits, which it sold to rival automakers after surpassing climate mandates in states such as California, according to Politico’s E&E News.
While details about rival automakers purchasing Tesla’s carbon credits are often undisclosed, Chrysler is reported to have purchased $2.4 billion worth of the credits by 2022.
Still, some Democrats have continued pushing the narrative that Musk has taken advantage of various government subsidy programs at the expense of other Americans, such as Democratic Connecticut Rep. Rosa DeLauro, who claimed in a March 5 post on X that Musk and Trump are “looting from the American people to fund massive tax breaks and subsidies for the richest Americans and biggest corporations.” DeLauro voted in favor of the IRA in 2022.
Tesla did not respond to a request for comment from the Daily Caller News Foundation.
DeLauro’s office, Warren’s office and Jayapal’s office did not respond to requests for comment from the DCNF.
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