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Sounds like this is the result of "accelerated depreciation." As far as I can tell, that's a strategy that ultimately allows you to pay less tax one year and m

Sounds like this is the result of "accelerated depreciation." As far as I can tell, that's a strategy that ultimately allows you to pay less tax one year and more tax in a later year. I don't have a strong feeling on the value of that particular tax law, but it seems somewhat less nefarious than the implied "not paying taxes at all."

cma 2y ago
I'm guessing in a different year the rate will be much lower: afterall, he gave away $1 million a day to a random registered republican voter in a key swing state to get around laws that prevent buying votes and paying people to register to vote.
- bradac56 2y ago
  That was with his money (you know richest person on the planet) and had nothing to do with Tesla.
  - nativeit 2y ago
    I won’t argue it was with his own money, but everything a CEO does affects the company.
  - cma 2y ago
    Ah I forgot his money has nothing to do with tesla and he doesn't run tesla or have a huge stake in it. And he in no way benefits from how future tax changes affect them, right?
    - bradac56 2y ago
      [flagged]
hatthew 2y ago
Not an accountant but this is my understanding as well
m3kw9 2y ago
Same amount of money now is worth more than in future
- johnnyanmac 2y ago
  I think the quiet part here is 1. Companies see downwinds of a recession, so they want to wait for good times to do anything. Actually grow, pay off debts, make lateral moves. 2. companies were banking on administration changes to help bailed them out. So far, they seem to have won that gamble. so there's general truth and then there's speculation about used to influence decisions.
scheme271 2y ago
I think this is a tax avoidance strategy that may save a lot on taxes. E.g. use accelerated depreciation to avoid taxes in a really profitable year and then if you have a loss or much lower profit in a subsequent year, you have successfully avoided a bunch of taxes. Not an accountant or tax lawyer so there may be a catch here.
- asdasdsddd 2y ago
  That makes no sense, the integral of the tax credit is always the total value of the asset so it doesn't matter unless there are relevant tax brackets here? Businesses can also carryforward losses right?
- johnnyanmac 2y ago
  > use accelerated depreciation to avoid taxes in a really profitable year Tesla's earning calls tell me he should have just paid the taxes this year, in that case. Welp, hindsight.
jmward01 2y ago
Others have pointed out the strategy allows for picking the best year to pay taxes and therefore avoiding a lot of taxes. I'd add to that argument that the current administration is likely to create exceptionally favorable policies for Tesla specifically so they really should burn every trick now since they are about to get a whole new bag of them. I can just see it now, legislation built for Tesla. Of course it will be named something like Save The Children Clean Air Tax Credit Act but it will apply to Tesla almost exclusively as a way to plow money towards loyalist.
- kjksf 2y ago
  That only works if you have a time machine or a crystal ball. When those decisions were made, Tesla's CFO didn't know who'll win the election. Trump will likely cancel the $7.5k EV credit so I don't see the "policies favorable to Tesla". Trump was campaigning on renewing his previous corporate tax cuts and making more tax cuts. It's not a secret and not specific to Tesla.

cma 2y ago

I'm guessing in a different year the rate will be much lower: afterall, he gave away $1 million a day to a random registered republican voter in a key swing state to get around laws that prevent buying votes and paying people to register to vote.

bradac56 2y ago
That was with his money (you know richest person on the planet) and had nothing to do with Tesla.
- nativeit 2y ago
  I won’t argue it was with his own money, but everything a CEO does affects the company.
- cma 2y ago
  Ah I forgot his money has nothing to do with tesla and he doesn't run tesla or have a huge stake in it. And he in no way benefits from how future tax changes affect them, right?
  - bradac56 2y ago
    [flagged]

hatthew 2y ago

Not an accountant but this is my understanding as well

m3kw9 2y ago

Same amount of money now is worth more than in future

johnnyanmac 2y ago
I think the quiet part here is 1. Companies see downwinds of a recession, so they want to wait for good times to do anything. Actually grow, pay off debts, make lateral moves. 2. companies were banking on administration changes to help bailed them out. So far, they seem to have won that gamble. so there's general truth and then there's speculation about used to influence decisions.

scheme271 2y ago

I think this is a tax avoidance strategy that may save a lot on taxes. E.g. use accelerated depreciation to avoid taxes in a really profitable year and then if you have a loss or much lower profit in a subsequent year, you have successfully avoided a bunch of taxes. Not an accountant or tax lawyer so there may be a catch here.

asdasdsddd 2y ago
That makes no sense, the integral of the tax credit is always the total value of the asset so it doesn't matter unless there are relevant tax brackets here? Businesses can also carryforward losses right?
johnnyanmac 2y ago
> use accelerated depreciation to avoid taxes in a really profitable year Tesla's earning calls tell me he should have just paid the taxes this year, in that case. Welp, hindsight.

jmward01 2y ago

Others have pointed out the strategy allows for picking the best year to pay taxes and therefore avoiding a lot of taxes. I'd add to that argument that the current administration is likely to create exceptionally favorable policies for Tesla specifically so they really should burn every trick now since they are about to get a whole new bag of them. I can just see it now, legislation built for Tesla. Of course it will be named something like Save The Children Clean Air Tax Credit Act but it will apply to Tesla almost exclusively as a way to plow money towards loyalist.

kjksf 2y ago
That only works if you have a time machine or a crystal ball. When those decisions were made, Tesla's CFO didn't know who'll win the election. Trump will likely cancel the $7.5k EV credit so I don't see the "policies favorable to Tesla". Trump was campaigning on renewing his previous corporate tax cuts and making more tax cuts. It's not a secret and not specific to Tesla.