New Delhi: Elon Musk has been vocal over his endorsement of Donald Trump over the last couple of months leading up to the elections. He made his support for Trump clear with a string of posts on social media platform X. He went above and beyond, to fund Trump’s election campaign with more than $75 million over the past three months. He also made an unprecedented effort to launch a $1 million giveaway to registered voters in battle ground states that pledge support for the First and the Second Amendment act passed as a petition under the America Pac established by Musk.
Musk’s support for Trump has been unseen in American history. Business and politics have been shaking hands for a long time now with wealthy individuals endorsing and backing political candidates either through financial support or public endorsements. However, Musk’s $75 million investment into the Trump campaign has never been seen before. Wealthy individuals and corporations stand to receive massive benefits in return for their financial support and endorsements for political candidates or parties through favorable business policies and lower taxations on revenues.
So, it is pretty much straightforward that Trump is set to benefit massively from his endorsements and public backing for Trump if Trump goes on to win the 2024 elections. Here is exactly how Musk can benefit from backing Trump:
Government contracts worth billions
Many of the Musk-owned companies are closely linked with the US government and regularly do business deals. Recently, NASA invested $834 millions into SpaceX for the development of a vehicle that would aid take the International Space Station out of orbit. Further, the US Space force awarded SpaceX more than $700 million to assist with a series of planned launches in the coming years.
Tesla has also received massive government contracts worth millions from the Defense and Transport departments among many other governmental agencies. According to a New York Times survey, Tesla and SpaceX has received government contracts worth 15.4 billion over the past decade. Tesla has received more than $9 billion in federal funding since 2018.
Elon Musk is financially tied with the federal government and his financial backing for Trump and the endorsement for the Republican Party can offer massive benefits to the billionaire entrepreneur.
Regulatory support for his businesses
Several of Musk’s companies are tied in regulation with federal agencies and regulators. Endorsing Trump and the Republican Party could offer some relief to the relentless regulatory accusations on Musk’s companies.
Tesla has been in dispute with the National Highway Traffic Safety Administration after its probe into the series of accusations on the alleged dangers of the Tesla’s self-driving features. Meanwhile, SpaceX faces multiple complaints from the National Labor Relations Board on the severance packages it offers its employees and the illegality of the termination of its employees.
Federal agencies execute laws enacted by the Congress, however, the sitting president makes the final decision to enforce the law. If Trump wins, he is likely to offer protection to Musk and his companies from legal battles and accusations made on him.
The US President is in control of the state and central agencies, so he can direct the heads of the agencies to take a certain course of action, Richard Pierce, a law professor at George Washington University, focusing on government regulation, told ABC News in an interview. Pierce added, “They of course have statutory boundaries but they do what the president tells them to do.”
Massive tax breaks
Musk stands to benefit from a massive tax break under the plan Trump has proposed for him. Trump proposed a plan for Musk in which he takes a role in the Trump administration as the head of a new government efficiency commission. Assuming a role in the government will allow Musk to benefit from a scheme introduced in the early 1900’s that compels wealthy individuals who take up a position in the government to sell all their stakes in a privately owned company.
Under the Section 1043 of the federal tax code, Musk would be able to forgo all the capital tax levied on the sale of his stakes in all the companies. This federal code was put into place to lessen the risk burden on wealthy individuals who aspire to join government politics. If Musk decides to join the government, he would be the wealthiest person to take benefit of the provision, and will end up saving tens and billions of dollars of personal wealth.
According to many experts, despite the attractive prospects of saving billions of dollars in taxes, Musk would still choose to not to forgo his stakes and holding in his companies on which he has tight control on, nor would he choose to lose out large profits on fast-growing stocks as compared to less profitable investments options provided by the government.
Musk’s endorsement and financial backing for Trump is not for his adoration for Trump, although the two seem to be bromancing regularly. The seasoned entrepreneur sees his investments into Trump’s campaign as an investment that would pay massive dividends down the line. Musk would be able to save billions of dollars on his $75 million investments in the Trump campaign by benefiting from tax cuts, securing government contracts and favorable regulatory policies.
