Politicians in Nevada are patting themselves on the back for securing a deal with Elon Musk to be the home of Tesla's future "gigagfactory" to build electric-car batteries. Instead, they ought to be apologizing to state taxpayers for giving away the store to Musk, write the editors at the Wall Street Journal. Sure, it's common practice these days for governments to grant tax breaks in order to lure businesses. "But the Tesla giveaway is in a category of its own, coming in an unproven market for a company that has never recorded an annual profit (based on generally accepted accounting principles), notwithstanding various subsidies," says the editorial.
Tesla will pay no property taxes for 10 years or sales taxes for 20, at a price of $1.1 billion to taxpayers. It will also get a discount of 10% to 30% on its electric bill, which means other customers will pay an extra $1.84 a year to make up for it. There's more, but the bottom line is that the company will essentially do business tax-free in the state, which presumably could have gotten a better deal given that it has the only active lithium mines in the US. Musk is a genius, writes the Journal: "He's figured out that as long as you pick a politically favored industry you can be one of the world's richest men and still get taxpayers to finance your operations and become even richer." Nevada politicians who got "fleeced" could learn a lesson. Click for the full editorial. (Read more Elon Musk stories.)