The Department of Government Efficiency, a.k.a DOGE (and please know it brings me immense pain to use that acronym), is a temporary organization introduced under the Trump Administration, headed by billionaires Elon Musk and Vivek Ramaswamy.
Initially intended to revamp government technology per Executive Order 14158, DOGE has extended its reach into almost every aspect of the federal government in recent weeks, all in the name of eliminating waste and improving efficiency. I am sure Musk is genuinely interested in making the U.S. government more efficient, but only if that means more efficient at lining his pockets at the expense of American citizens.
And I do agree that the federal government could be more efficient – that it gets bogged down in bureaucracy and that some expenditure is excessive. There certainly is waste. However, where DOGE and I disagree is on where the waste is. In their pursuit of identifying and eliminating America’s waste problem, DOGE overlooks one crucial thing: Elon Musk is America’s waste problem.
In their endeavor to “reduce waste” in the government, DOGE plans to eliminate “discretionary spending,” targeting international organizations (notably USAID), public media, the Department of Education – cutting an estimated $900 million from the department’s Institute of Education Sciences – and, most likely, Social Security, Medicare, and Medicaid.
They have also been gutting the federal government, massively reducing the federal workforce, laying off tens of thousands of federal workers at more than a dozen agencies, in addition to the 75,000 that took “buyouts” earlier this year.
The agencies that have been hit the hardest so far are USAID, which has been virtually leveled, the Environmental Protection Agency, the Department of Health and Human Services, the Department of the Interior (including the National Park Service), and the Department of Veteran Affairs – just to name a few. DOGE also intends to slash federal regulations, making it easier for mega-corporations – like Musk’s – to cut corners at the expense of consumer safety.
All of this is in attempt to find the federal government more money. But if you ask me, finding more money is actually quite simple. And it isn’t through cutting social welfare and education programs. Musk just needs to pay his taxes.
In the United States, individual and corporate income taxes made up 60 per cent of federal revenue in 2024. So, you would think the most efficient way to make the federal government more money would be to ensure that individuals and corporations were being fairly and effectively taxed.
In other news, earlier this week, DOGE cut the IRS in half.
According to the Institute of Taxation and Economic Policy, Tesla has paid $48 million in federal income tax in the last three years. The company’s U.S. income was $10.8 billion. That means that, compared to the statutory corporate tax rate for companies of 21 per cent, Tesla’s rate was just 0.4 per cent. Musk claims that the reason Tesla is not paying more in federal and state taxes is that a majority of its activity is overseas. However, 48 per cent of Tesla’s total revenue came from U.S. sales in 2024.
Through a combination of tax breaks and loopholes, Tesla almost entirely avoids paying taxes. This is not a Tesla-specific problem either, but rather an industry standard. It is almost commonplace for companies to restructure their operations so their overseas subsidiaries report income rather than their US operation, effectively getting out of paying federal taxes.
Alongside his companies, Musk pays virtually nothing in federal income taxes. In 2024, he paid $11 billion in taxes – and he won’t let anyone forget it, tweeting that the IRS should give him a trophy. But, in all the ten years prior, he has paid almost nothing.
In 2018, he did pay nothing. You don’t have to pay income tax on your stocks, and a majority of Musk’s wealth is in his stocks. By “borrowing” the money from his stocks rather than selling it, he can tap into his net worth without technically adding to his income. In fact, Elon Musk doesn’t receive a salary from Tesla at all. So, he can get richer and richer while exploiting loopholes to avoid paying federal income taxes.
Like how Tesla’s questionably legal tax evasion is not an anomaly, neither is Musk’s. In the United States, tax rates are calculated via income brackets, with the lowest sitting at 10 per cent and the highest at 37 per cent. According to Forbes, the 25 richest Americans, between 2014 and 2018, paid a true tax rate of 3.4 per cent. This egregious tax dodging is a legal gray area, and no one, least of all DOGE, seems particularly interested in ending the practice.
All of this is to say that maybe the guy who probably has an entire legal team to help him avoid paying the federal government isn’t the most qualified to lead the charge on cracking down on federal spending. Some might argue that Musk is stepping into a new role, that of a public servant aiming to give back to the people who made him his money. Maybe he wants to make government spending more efficient for perfectly benign and even philanthropic reasons. But from what we know about his previous “charitable” endeavors – just read anything on The Musk Foundation – this isn’t likely.
It’s no secret that Trump’s presidency has made Musk much, much wealthier. Neither is it that Musk has a vested interest in securing Trump’s presidency. After all, Musk donated $288 million to Trump’s campaign, according to the Washington Post. This is because he knows he will make lots of money under Trump. And he has.
Since the election, Musk’s net worth has increased by over $50 billion, according to Forbes. At the time of writing, Elon Musk’s net worth is $358 billion, more than the GDP of around 150 countries. His appointment in the federal government should not be mistaken for anything other than a blatant attempt to redirect funds into his own pockets under the guise of “government efficiency.”
In the coming months, Musk and DOGE will claim to have saved the American people billions of dollars, having identified massive sources of waste within the federal government. I am sure we will see a massive reduction in federal spending, but what they’ll determine as “waste” will be in areas critical to the livelihoods of US citizens.
DOGE will continue to cut funding and gut federal departments that help American citizens – regulating water and food, protecting national parks and forests, maintaining nuclear weapons – all areas which certainly can’t afford to be cut. What they won’t do is regulate corporate tax-dodging that make industry tycoons like Musk richer. They also don’t seem particularly interested in closing tax loopholes and ensuring the country’s ultra-wealthy pay their dues. It is more than apparent that the only people who will truly benefit from DOGE’s operations are Musk and his billionaire class.
“Elon Musk” by dmoberhaus is licensed under CC BY 2.0.