Elon Musk's potential move to US gov't could defer billions in capital gains tax
Elon Musk's potential move to US gov't could defer billions in capital gains tax
In a move that has raised eyebrows across political and financial circles, President-elect Donald Trump announced that Elon Musk, CEO of Tesla and SpaceX, will lead the proposed “Department of Government Efficiency,” or DOGE, alongside entrepreneur Vivek Ramaswamy. The announcement, made on Nov. 12, envisions Musk helping streamline federal operations, but it has also fueled speculation about significant financial benefits for the billionaire.
If Musk assumes a formal government role, experts suggest he could defer billions of dollars in capital gains taxes. Under federal guidelines, assets divested to comply with conflict-of-interest rules could allow Musk, whose net worth exceeds $300 billion, to postpone paying taxes indefinitely. This potential benefit has already sparked criticism, as the CEO of Tesla and SpaceX has previously profited significantly from government contracts.
Criticism and conflict of interest concerns
The legality of establishing DOGE remains uncertain. As only Congress can create a new government department, DOGE is likely to operate as an advisory body unless formal legislation is passed. With Republicans set to hold a majority in both the House and Senate in 2025, the proposal may face fewer legislative hurdles.
Musk’s appointment comes amidst allegations of conflict of interest. Critics point to Tesla’s and SpaceX’s extensive reliance on federal funding, suggesting that Musk’s new role could provide him with undue influence over government contracts. Further complicating matters, Musk actively supported Trump’s reelection campaign, appearing at rallies and funding initiatives in swing states like Pennsylvania. Notably, Tesla’s stock surged after Trump’s victory, boosting Musk’s wealth by over $20 billion.
Whether Musk’s involvement will result in substantive reforms or further controversies remains to be seen.
Also, today the Dogecoin lawsuit against Elon Musk was dismissed following the drama of the summer surge.
