Elon Musk, who is reportedly experiencing a decline in advertising revenue through Twitter/X, has been ardently supporting the controversial figure, Donald Trump. His unexpected actions have raised eyebrows, such as sporting multiple MAGA hats and instigating a questionable $1 million lottery for registered voters in swing states. So, what’s driving Musk’s behavior?
These enigmatic actions were highlighted during a campaign trail when VP candidate Tim Walz humorously suggested that Musk was acting as Trump’s unofficial VP. Walz questioned why Musk had resorted to attention-grabbing antics at Trump’s rallies.
However, it doesn’t seem that Musk has suddenly become an ardent Trump supporter. His Twitter feed has always been rife with far-right narratives, albeit without Community Notes. Yet, he has shown reluctance to fully embrace the MAGA ideology, declining to endorse conspiracy theories about the 2020 election.
His actions might not be entirely about reducing his tax bill either. Many would assume that as the world’s richest man, Musk’s support for Trump, who has promised to cut taxes, is self-serving. However, according to ProPublica’s IRS investigations, Musk already pays little to no federal income tax. While Trump could attempt to lower the tax rate on the sale of stocks, that decision ultimately lies with Congress.
According to a detailed New York Times report, Musk’s primary concern may be dodging potential legal consequences. Musk’s four companies are currently under 20 federal investigations, including alleged legal violations and discrimination lawsuits at Tesla, SpaceX, and Neuralink.
Musk is no stranger to lengthy court battles with the SEC and other regulators, usually resulting in fines that are negligible compared to his wealth. However, the sheer number of ongoing investigations might finally catch up with him.
Additionally, Musk is facing multiple private lawsuits from Tesla owners’ families, alleging that Musk oversold Tesla’s Full Self-Driving (FSD) capabilities, resulting in fatalities and injuries. The same allegations are being investigated by the National Highway Safety Traffic Administration and the DOJ.
Despite these legal battles, Musk remains a significant player within the federal government, being one of its largest contractors. His companies have won nearly $16 billion in contracts over the last decade, primarily with the Pentagon and NASA. His dependence on government money is increasing, with his companies securing $3 billion from various federal agencies last year.
Trump has proposed a “government efficiency commission” to recommend cuts to federal agencies and changes to regulations. This proposal could potentially give Musk the power to influence regulators overseeing his companies, creating a significant conflict of interest.
The potential financial implications are staggering. Protecting Musk’s $3 billion annual government contracts and his businesses from investigations that could negatively impact stock prices is certainly worth his recent political antics.
