Subsidy-dependent billionaire asks Nevada officials for millions more in government handouts
Billionaire Elon Musk is queued up to get yet another taxpayer-funded “incentive” package from the state of Nevada — this time for just over $9 million.
The $9.2 million in tax abatements, credits and direct subsidies for Musk’s Hyperloop Technologies might pale in comparison to the $1.3 billion incentives package he negotiated previously for his other company, Tesla Motors, but it represents a trend of Musk-controlled business ventures happily milking the Silver State’s new government-handout cow.
In addition to owning Hyperloop and Tesla, Musk is also chairman of SolarCity — yet another benefactor of the Governor’s Office of Economic Development’s constitutionally dubious zeal to give taxpayer money to private billionaires.
GOED will be considering Musk’s request for Hyperloop’s handout on Friday.
For its $9.2 million in tax benefits — including $750,000 in “Catalyst Fund” tax credits — Hyperloop Technologies is promising to create a whopping 214 jobs.
Over the course of a decade.
To put that in perspective, Nevada’s small businesses created more than 18,000 new jobs last year alone. And that’s according to a Nevada Department of Employment Training and Rehabilitation report.
It’s not just the paltry number of jobs that is the problem. The price tag to taxpayers, who are currently struggling under the largest tax increase in state history, is of equal concern.
Especially given the fact that the company’s owner isn’t exactly strapped for cash. In fact, Musk has turned government handouts into a fairly lucrative business model.
Altogether, Musk’s companies have raked in at least $5 billion in taxpayer money, according to the LA Times. And given that Nevada’s incentives package with Tesla is one of the 15 largest deals ever negotiated in the United States, it’s safe to say the Silver State is significantly contributing to Musk’s taxpayer-subsidized bottom line.
With the exception of Musk’s space technology company, SpaceX, most of that money has been received in exchange for promising politicians that his various companies will create a handful of jobs, sometime down the road.
The question Nevada — and, quite frankly, the rest of America — ought to be asking is, “is it worth it?”
Even Tesla, which received the largest incentives package in state history, is only promising to create roughly 6,000 jobs within the next decade. Small businesses already existing in Nevada created three times that amount in just a single year.
And far from being given a $1.3 billion handout, like the one Tesla received, small businesses in the Silver State are struggling with a $1.5 billion tax increase passed in 2015.
Where are the tax “incentives” for the startup company that is finally able to afford its first employee? Where is the slew of tax benefits for the entrepreneur who is still working from a garage-based office?
Politicians who are obsessed with handing out taxpayer dollars to out-of-state billionaires seem to miss the obvious: Small businesses are the key to Nevada’s economic growth. More importantly, those local small businesses are the key to future prosperity and employment for nearly 60 percent of Nevada workers.
Hyperloop, Tesla and SolarCity are not the job-creating juggernauts of our state. In fact, Tesla is falling behind on its employment promises and SolarCity is currently laying off workers in the Silver State.
What makes politicians think Hyperloop will do any better?
More importantly, compared to the 18,000 jobs created by small local firms paying much higher taxes, is Musk’s foggy job projections really worth $9.2 million?
Michael Schaus is communications director of the Nevada Policy Research Institute, a nonpartisan, free-market think tank. For more visit http://npri.org.