Poor Elon Musk. The PayPal guru is only worth, like, $12 billion. His place in Bel-Air was just a shack, apparently, so he bought his next-door neighbor's estate for nearly $7 million. And don't get the guy started about the hardship of having to commute through the Westside. The horror.
See also: Elon Musk Thinks His Westside Commute Is L.A.'s Top Problem
But it's his side venture, Hawthorne-based SpaceX, that's really hurting. The company has received a $440 million government grant, $1.6 billion worth of deals with taxpayer-funded NASA and, by its own account, $5 billion worth of satellite launch deals and other commitments. Who could run a business based on those hand-to-mouth revenues?
What Elon really needs is for the hardworking people of California to each pitch in and give him more money:
So said the state Board of Equalization this week, which endorsed a proposal by California Assemblyman Al Muratsuchi to give Musk's SpaceX the tax break it deserves.
Muratsuchi's office says the bill, AB 777, would provide rocket propulsion firms a "business inventory tax exemption."
SpaceX, located just outside Muratsuchi's district, sponsored the proposal. Why?
The firm complained* that its "rockets used for space" travel should be designated as business
supplies inventory, which would trigger the land property tax exemptions, the Board of Equalization told us. (*Our word, not theirs.)
As it is, rockets aren't seen as supplies. (We keep our rockets next to our paperclips, file folders and Post-it notes, but we have also struggled to find a writeoff for them.)
The board says this gift would cost the taxpayers of Los Angeles County $1.1 million a year. That extra cash — at a time when L.A. public schools are falling apart — will certainly make a difference to Musk's ability to generate more cash for the
The equalization board voted 5-0 to support the legislation. Here's the deal, according to a BOE statement, which doesn't sugarcoat the giveaway as badly as Muratsuchi's office does:
This legislation seeks to exempt space flight property from property taxes until Fiscal Year 2024-25. The proposal defines space flight as any flight designed for orbital, suborbital, or interplanetary travel by a satellite, space vehicle, or space station or facility of any kind. The exemption would only apply to material that is intended for space launch.
The bill, Muratsuchi says, is designed "to make sure that aerospace jobs are kept here in California."
Was there any threat that Musk would take his jobs elsewhere? Not that we know of. Plus, it's a growing industry, not a declining one, especially given the fact that taxpayers are already giving Musk's firm hundreds of millions of our dollars.
This is all about about the strange phenomenon of Democrats buying into the myth of conservative, trickle-down economics, whereby the ultra-wealthy like Musk would theoretically reward society with jobs and intangible benefits if only we would give them yet more money than they already have.
If you like this story, consider signing up for our email newsletters.
SHOW ME HOW
And, as we've all seen, in an era of Bush tax cuts for the wealthy that extended through the Great Recession and through Obama's first term, we all benefited from the job opportunities and general economic prosperity handed down by America's rich who, during that time, got richer than at any time in American history.
Clearly, we've all done so well as a result.
So, there you have it. Freedom from at least some property taxes until 2025 for a billionaire's company. What a country (if you're rich)!