Split Thread Trickle-down economics

[Roger Ramjets]

musk is in $600m in political contributions in the last two election cycles while raking in these government contracts. not hard to see where he's plowing his money and why

Government contracts are only a small part of SpaceX's activities.

Let's look at where he plowed his money, and then we can figure out why:-
Musk throws $276M behind Republicans in midterms

Between July and September, Musk gave $158 million to the Senate Leadership Fund, a super PAC backing Republican Senate candidates, and $20 million to the Congressional Leadership Fund, which supports GOP House candidates. Musk’s America PAC, which he launched during the 2024 election, received more than $76 million. He also gave $10 million to the Lone Star Liberty PAC backing Texas Republican Senate candidate Ken Paxton, $10 million to the Republican Governors Association and $2 million to the Republican Attorneys General Association.

You will notice a pattern here - all the money is going to Republicans. But why?

“If Democrats take control of Washington and win key gubernatorial and attorney general races this November, then America risks becoming a socialist, woke and borderless country,” Andrew Romeo, a spokesperson for America PAC, said in a statement to the Times and confirmed by The Hill. “These robust investments have allowed the GOP apparatus to get its message out so Republicans can have a fighting chance to defy history,” Romeo added.

If it was just about getting contracts Musk would be bribing supporting whichever party was most likely to win, but that's not what he's doing. Musk has talked many times about the 'Woke Mind Virus', saying it has "thoroughly penetrated entertainment and is pushing civilization towards suicide" and must be defeated or "nothing else matters". Regarding Democrats he said "they have become the party of division & hate". In his authorized biography of Musk, Walter Isaacson wrote that Musk began leaning right in 2021 "partly triggered by his daughter Jenna's transition, her embrace of radical socialist politics, and her decision to break off relations with him."

Business people generally support right-wing parties because they are more 'business-friendly', but this goes way beyond that. Musk is spending all this money on Republicans because he has been infected with the conservative mind virus. That's what partisanship does, and the hate that 'the left' directed at him only made it worse.

Framing Musk's support for Republicans as a quid quo pro ignores the strong ideological element, to which liberals have contributed a significant part. I'm no fan of Musk's politics but I don't doubt they are sincere.

 

[Roger Ramjets]

In the US Section 179 of the U.S. Internal Revenue Code allows businesses to immediately expense the full cost of qualifying equipment, software, and property in the year it is placed in service. Though the max deduction for this year is $2,560,000.

And the deduction cannot exceed your total business net income for the year.

Interesting. I'm not sure what the law is in New Zealand today but when I ran a business in the 90's 'qualifying' equipment was gradually written off over a 5 year period. Note that this only applied to stuff that was written off due to wear or redundancy, which makes sense because it's a real loss. You don't want things having a 'book' value that exceeds their real worth, and it wouldn't be fair to have to pay tax on assets you don't actually have.

In any case we see the maximum amount of $2.56 million is insignificant for a company the size of SpaceX.

The ignorance many people show towards the realities of business is not good. I blame the education system. The sad part is this ignorance is creating false narratives and affecting how people vote. Ironically it causes demagoges like Trump to get into power because it forces business people to vote conservative.

 

[psionl0]

In the US Section 179 of the U.S. Internal Revenue Code allows businesses to immediately expense the full cost of qualifying equipment, software, and property in the year it is placed in service. Though the max deduction for this year is $2,560,000.

And the deduction cannot exceed your total business net income for the year.

Yes, the Australian government also allows "instant asset write-off" under certain circumstances. This has been the case since the covid years. Prior to that, there was a "low value pool" which you could use to immediately write off some of the value of assets (saves calculating minute values of depreciation).

in spite of these exemptions, the main principle remains the same. Capital expenditure is not an expense (because with such expenditure, you gain an asset).

 

[Roger Ramjets]

That is stupid when the potential harm is predictable, as it adds layers of discovery and litigation to the process, only benefiting companies with a big legal department.

It's doubly stupid in cases where harm is predictably unpredictable, like anything affecting water flow.

So it's always stupid. Right.

I disagree. Think of all the things that could go wrong in your personal activities, then think about having to submit an impact report and harm prevention measures before you're allowed to do anything. Think not only of the cost, but the delays involved of complying with all this red tape. Then consider that it doesn't prevent all unpredictable harm. If that was put on us we would quite rightly complain about the 'nanny state' interfering in our lives.

There is a better way. Give us information and resources to help us avoid harm, and point out the serious legal consequences of failure. Sensible people take reasonable precautions but don't go overboard. Of course that means bad things occasionally happen, but it also means resources aren't wasted on excessive caution.

Musk just wants profits now, lawsuits and bribes later.
It's a familiar pattern

Bribes are bad, but so is red tape. It shouldn't take years to get a project approved. Most large projects take years to even begin making a profit, and extra delays could make them unviable. Excessive red tape not ony stifles innovation and economic output, it also encourages bribery.

 

[The Great Zaganza]

No, THEY didn't build that.
That is just a self-fellating story entrepreneurs like to tell themselves to excuse they grifting off the rest of society.

Pretty much without exception, major inventions, discoveries and breakthroughs were done by multiple people or companies more or less simultaneously, because they could all rely on society and government support (and tech transfer). No single individual was necessary for getting us a specific product that someone else would have provided, too, in a slightly different shape or form.

It is the environment that enables progress, some individuals in it are in a position to take advantage of it - mostly because they don't have to do three jobs at the same time.

 

[The Great Zaganza]

Bribes are bad, but so is red tape. It shouldn't take years to get a project approved. Most large projects take years to even begin making a profit, and extra delays could make them unviable. Excessive red tape not ony stifles innovation and economic output, it also encourages bribery.

that is a generalization that might be true in some case, or not in others.
It is up to the investor to prove why Approval Processes can be cut short. Laws are difficult to pass, so there is probably a reason for whey they are there.
And if the viability of your project hinges on a shortcut in the regulatory process, it probably isn't really viable in the first place.

Musk has a proven track record of violating laws and regulations, so some extra scrutiny should be expected by his company, and demanded by the citizens.
If you have a flawless history of sticking to the rules and paying for all unexpected damages, then I agree, regulators are probably safe to cut you some slack on your next project.

 

[psionl0]

that is a generalization that might be true in some case, or not in others.

There are two basic reasons for red tape: to justify the size of the bureaucracy (that you are heading) or as an alternative to an outright ban (which might be illegal or unconstitutional).

 

[The Great Zaganza]

There are two basic reasons for red tape: to justify the size of the bureaucracy (that you are heading) or as an alternative to an outright ban (which might be illegal or unconstitutional).

that is, of course, nonsense, especially in the US.
By every measurement, the US bureaucracy is tiny in size, employees and budget for a country the size, population and GDP, mostly because that's where every politician thinks it's safe to make cuts (because bureaucrats can't go on strike).
Most observers agree that the US is suffering from a lack of, not an excess, of administration. The IRS could make 10x the revenue of the cost from doubling the number of employees. And the US court system is living in the crutch of Pleas because it would just come to a halt if cases actually went to trial.

And no, Regulation is about doing things Right, not about banning them.
If the only way you can run your factory is to poison the nearby population, then we can wait for someone who can build a better factory.

It's a standard "fish doesn't know what water is" problem of only noticing bureaucracy when it is an inconvenience, because you couldn't even live if it didn't work most of the time.

 

[dirtywick]

Government contracts are only a small part of SpaceX's activities.

Let's look at where he plowed his money, and then we can figure out why:-
Musk throws $276M behind Republicans in midterms

You will notice a pattern here - all the money is going to Republicans. But why?



If it was just about getting contracts Musk would be bribing supporting whichever party was most likely to win, but that's not what he's doing. Musk has talked many times about the 'Woke Mind Virus', saying it has "thoroughly penetrated entertainment and is pushing civilization towards suicide" and must be defeated or "nothing else matters". Regarding Democrats he said "they have become the party of division & hate". In his authorized biography of Musk, Walter Isaacson wrote that Musk began leaning right in 2021 "partly triggered by his daughter Jenna's transition, her embrace of radical socialist politics, and her decision to break off relations with him."

Business people generally support right-wing parties because they are more 'business-friendly', but this goes way beyond that. Musk is spending all this money on Republicans because he has been infected with the conservative mind virus. That's what partisanship does, and the hate that 'the left' directed at him only made it worse.

Framing Musk's support for Republicans as a quid quo pro ignores the strong ideological element, to which liberals have contributed a significant part. I'm no fan of Musk's politics but I don't doubt they are sincere.

it’s true he’s a complete tool, as if his roman salute and spending his days tweeting about white replacement theory aren’t a clue to what he thinks. but he’s also financially and personally benefited from his investments into corruption from government contracts, his actions at doge, and his new position at the department of war

https://www.congress.gov/119/meeting/house/117956/documents/HMKP-119-JU00-20250226-SD003.pdf

Pete Hegseth appoints Elon Musk to US taskforce on future of warfare

A year after his explosive tenure at Doge, the SpaceX CEO is back in the Trump administration’s good graces

www.theguardian.com

 

[Frank Newgent]

Yes, the Australian government also allows "instant asset write-off" under certain circumstances. This has been the case since the covid years. Prior to that, there was a "low value pool" which you could use to immediately write off some of the value of assets (saves calculating minute values of depreciation).

in spite of these exemptions, the main principle remains the same. Capital expenditure is not an expense (because with such expenditure, you gain an asset).

Don't mean to quibble with you but you keep saying things. Please look at line 13.

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

 

[Roger Ramjets]

it’s true he’s a complete tool, as if his roman salute and spending his days tweeting about white replacement theory aren’t a clue to what he thinks. but he’s also financially and personally benefited from his investments into corruption from government contracts, his actions at doge, and his new position at the department of war

Please tell us how much Musk has 'financially and personally benefited from' this new position, and how it is an 'investment into corruption'.

 

[dirtywick]

the new position was one of the benefits

 

[Roger Ramjets]

And no, Regulation is about doing things Right, not about banning them.

That's what it's supposed to be about, but it's easy to get carried away.

If the only way you can run your factory is to poison the nearby population, then we can wait for someone who can build a better factory.

All factories poison the local population. In fact, all people poison the local population. A 'better' factory may reduce it, but can't eliminate it entirely. So we set what we consider to be acceptable limits, balancing the harm against the benefits.

It's a standard "fish doesn't know what water is" problem of only noticing bureaucracy when it is an inconvenience, because you couldn't even live if it didn't work most of the time.

Nobody's saying bureaucracy is inherently bad. But unnecessary bureaucracy is bad. The question who gets to decide what's necessary. When bureaucrats are in charge it tends to expand because they have no reason to limit it.

 

[psionl0]

Don't mean to quibble with you but you keep saying things. Please look at line 13.

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

You have posted a link to Schedule C (Sole Proprietorship) and line 13 is where you enter "Depreciation and section 179 expense deduction".

But I have no idea why. What are you arguing against?

 

[Roger Ramjets]

the new position was one of the benefits

I asked how much, and in what way is it an 'investment into corruption'. Your non-answer suggests you don't know.

 

[Roger Ramjets]

Red tape

red tape is usually defined... as government policies, guidelines, and forms that are excessive, duplicative or unnecessary, and that generate a financial or time-based compliance cost... While a regulation may be useful, the cost of imposing it may exceed the benefits.

In March 2023, New Zealand established a Ministry for Regulation, which promotes a culture where "regulation is a last resort."... Among the Ministry's "horror stories" was a proposal to reduce the size of flour dust in commercial bakeries to such a low level that it couldn't be reliably measured or distinguished from other particles, making compliance effectively impossible.

In the European Union (EU), reducing the administrative burden on firms has been a prominent theme since the 1990s... In the United States, cutting red tape was a central principle of a 1993 National Performance Review study requested by the Clinton Administration.

The existence of regulations and authorizations provides a kind of monopoly power to the officials who must approve or inspect regulated activities... bureaucrats have a great deal of power which may lead to corruption. Officials may even intentionally introduce new regulations and red tape in order to be able to extract more bribes by threatening to deny permits.

 

[Frank Newgent]

You have posted a link to Schedule C (Sole Proprietorship) and line 13 is where you enter "Depreciation and section 179 expense deduction".

But I have no idea why. What are you arguing against?

You keep asserting that a capital expenditure is not an expense.

However, tax wise the Section 179 Deduction is an exception to this.

That's not how it works. Capital expenditure is not an expense but an investment and therefore, does not affect profit. (Why do you think that the tax man only allows you to included the depreciation of business assets and not their cost as a deduction?).

Perhaps you don't know the difference between tax accounting and financial accounting, I dunno.

You say that a capital expenditure does not affect profit. Tax-wise, a capital expenditure such a as a business vehicle can be treated as a deduction, an expense, just the same as an advertising expense, office expense, travel expense. Profit is what's left after expenses are subtracted from total revenue.

I thought posting a link to a Schedule C would be an easy illustration of this.

 

[Frank Newgent]

Red tape

red tape is usually defined... as government policies, guidelines, and forms that are excessive, duplicative or unnecessary, and that generate a financial or time-based compliance cost... While a regulation may be useful, the cost of imposing it may exceed the benefits.

In March 2023, New Zealand established a Ministry for Regulation, which promotes a culture where "regulation is a last resort."... Among the Ministry's "horror stories" was a proposal to reduce the size of flour dust in commercial bakeries to such a low level that it couldn't be reliably measured or distinguished from other particles, making compliance effectively impossible.

In the European Union (EU), reducing the administrative burden on firms has been a prominent theme since the 1990s... In the United States, cutting red tape was a central principle of a 1993 National Performance Review study requested by the Clinton Administration.

The existence of regulations and authorizations provides a kind of monopoly power to the officials who must approve or inspect regulated activities... bureaucrats have a great deal of power which may lead to corruption. Officials may even intentionally introduce new regulations and red tape in order to be able to extract more bribes by threatening to deny permits.

Along those lines, there is a new Michael Lewis book (Blockers: Rebels in the Deep State) just out which takes a look at tension between Trump political appointees and the permanent civil service in the US.

Blockers

'Michael Lewis has a peerless, uncanny gift for finding the human frontlines of the most abstract and complex stories... He routinely populates these battlefields with unlikely heroes from real life... This new book is a straight war report’ – Tim Adams, Observer'The “blockers” are the dedicated...

www.google.com.co

 

[theprestige]

Wait, the deep state is real? There really is a cadre of career civil servants, doing their best to cockblock the president?

 

[Frank Newgent]

Wait, the deep state is real? There really is a cadre of career civil servants, doing their best to cockblock the president?

Sounds like you may have to wait for the movie to understand it.