Sen. Elizabeth Warren (D-Mass.) has accused Elon Musk's SpaceX of benefiting from billions in U.S. government contracts while paying little to no federal taxes.
Warren Accuses Musk Of Dodging Taxes
On Monday, Warren took to X, formerly Twitter, and said that "Elon Musk's SpaceX is worth over $350 BILLION – after receiving billions in government contracts – but could be paying LESS in taxes than you."
She blamed Donald Trump's tax reforms, saying Republicans "rigged the tax code with loopholes for billionaire corporations" and demanded "no more corporate handouts."
Her remarks followed a New York Times report that SpaceX has avoided paying federal income tax on about $5 billion in taxable income since its founding in 2002 by using a legal tax strategy known as a net operating loss carryforward.
The provision, expanded indefinitely under Trump in 2017, lets companies offset future income with earlier losses.
Musk Previously Defended Tesla's Tax Strategy
Musk currently has a net worth of $375 billion, according to Bloomberg's Billionaire Index, making him the wealthiest individual on Earth.
In February earlier this year, Musk and Tesla Inc. (NASDAQ:TSLA) VP of Finance Sendil Palani denied claims that Tesla evaded taxes, saying that the company legally carried forward past losses under IRS provisions.
At the time, Musk acknowledged Tesla didn't pay U.S. federal income tax for several years, including 2024, since most profits come from overseas sales, but highlighted the need for comprehensive tax reform to address excessive loopholes.
SpaceX's Revenue Soars, Taxes Stay Low
Documents reviewed by the publication show that more than 75% of SpaceX’s revenue in 2020 and 2021 came from federal contracts. Despite that reliance on taxpayers, SpaceX paid only minimal taxes — including $483,000 to foreign governments and $78,000 in state taxes in 2021.
SpaceX's business is also booming. Revenue is expected to reach $15.5 billion in 2025, double the $7.4 billion reported in 2023.
Starlink, its satellite internet service, now generates more revenue than its rocket division, with 2.5 million users and $8 billion in 2023 sales.
Warren Broadens Criticism Of Musk
Warren has previously also targeted Musk over what she describes as conflicts of interest and misuse of government influence. In June, her office released a report titled "130 Days of Elon Musk," alleging more than 100 abuses of power during his time as a Trump administration adviser.
She has also criticized the Pentagon for awarding Musk's AI startup xAI a $200 million contract just days after its chatbot Grok was caught making antisemitic remarks.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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