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thewayneLast week Tuesday a Delaware Chancery Court Judge voided a compensation package for The Muskbrat that would have awarded him over a billion dollars PER WEEK for working for Tesla. Keep in mind he's also theoretically drawing pay checks from the former Twitter, SpaceX, Neuralink, whatever his AI project is called, and who knows what else.
Naturally he took this in good grace and accepted the judge's ruling and promised to assign an independent compensation panel for a more fair package to be decided upon.
HAH! KIDDING!
Adderall (and who knows what else) Boy took to The Social Media Site That Shall Always Be Known As Twitter, and posted a poll asking whether or not Tesla should be reincorporated in Texas. 87% said yes! Vox populi, the people have spoken! Of course the number of those voting in the Twitter poll were probably a vanishingly small number of actual Tesla stock holders. But never mind that. It was enough for The Muskbrat to get up on his high horse and proclaim that the question shall be put to Tesla shareholders whether or not to reincorporate in Texas.
Now, there's a lot of important things to consider here. According to TaxFoundation.org, "Texas does not have an individual income tax. Texas does not have a corporate income tax but does levy a gross receipts tax. Texas has a 6.25 percent state sales tax rate, a max local sales tax rate of 2.00 percent, and an average combined state and local sales tax rate of 8.20 percent. Texas’s tax system ranks 13th overall on our 2024 State Business Tax Climate Index." Delaware rates 21st with an 8.7% corporate tax rate.
But what he's really peeved about is the Chancery Court. They're the ones who forced him to buy Twitter, a stupid boast he made late one night that the Court took in earnest and made him follow through. And it's cost him a lot of money out of pocket, and a lot of shares of Tesla stock that he's trying to recover (previously discussed). The Chancery Court is a pretty cool thing, these judges are specialists in business law, it's hard to get tricks past them as Elon learned. If a deal is bound by Delaware law, it's going to remain bound by Delaware law.
So he's going to try to move Tesla's incorporation to Texas!
Is that a good thing?
You see, Texas just created its own form of a Chancery Court. It goes live later this year. Odds are that they're going to be every bit as hard-nosed about adhering to the law as the Delaware judges are, I tend to doubt, or at least hope, that they're not going to cut him any slack because "He's ELON!" He seems to want judges to be on his side because he's rich, and he's finding out in many cases that judicial systems don't seem to work that way.
Bear in mind that Elon did not invent Tesla. The guys who invented the Tesla Roadster incorporated in Delaware in 2003 for tax purposes and it's easy to incorporate there. The Muskbrat was an early large investor, and eventually effectively turfed the inventors and seized the company. Ever since then, he's more or less run the company as his personal fiefdom since then. He's stuffed the board with friends and family, there's little chance they'll gainsay him on any significant issue. Anything that actually comes to a stockholder vote? Well, we'll see about that.
To give you an idea of how popular it is to incorporate in Delaware, here's this little bit of tid: "The Delaware government says that over 68 percent of Fortune 500 companies are registered in the state, and 79 percent of US-based initial public offerings in 2022 were registered in Delaware." Yeah. Sort of says it all.
https://arstechnica.com/tech-policy/2024/02/elon-musk-proposes-tesla-move-to-texas-after-delaware-judge-voids-56-billion-pay/
Naturally he took this in good grace and accepted the judge's ruling and promised to assign an independent compensation panel for a more fair package to be decided upon.
HAH! KIDDING!
Adderall (and who knows what else) Boy took to The Social Media Site That Shall Always Be Known As Twitter, and posted a poll asking whether or not Tesla should be reincorporated in Texas. 87% said yes! Vox populi, the people have spoken! Of course the number of those voting in the Twitter poll were probably a vanishingly small number of actual Tesla stock holders. But never mind that. It was enough for The Muskbrat to get up on his high horse and proclaim that the question shall be put to Tesla shareholders whether or not to reincorporate in Texas.
Now, there's a lot of important things to consider here. According to TaxFoundation.org, "Texas does not have an individual income tax. Texas does not have a corporate income tax but does levy a gross receipts tax. Texas has a 6.25 percent state sales tax rate, a max local sales tax rate of 2.00 percent, and an average combined state and local sales tax rate of 8.20 percent. Texas’s tax system ranks 13th overall on our 2024 State Business Tax Climate Index." Delaware rates 21st with an 8.7% corporate tax rate.
But what he's really peeved about is the Chancery Court. They're the ones who forced him to buy Twitter, a stupid boast he made late one night that the Court took in earnest and made him follow through. And it's cost him a lot of money out of pocket, and a lot of shares of Tesla stock that he's trying to recover (previously discussed). The Chancery Court is a pretty cool thing, these judges are specialists in business law, it's hard to get tricks past them as Elon learned. If a deal is bound by Delaware law, it's going to remain bound by Delaware law.
So he's going to try to move Tesla's incorporation to Texas!
Is that a good thing?
You see, Texas just created its own form of a Chancery Court. It goes live later this year. Odds are that they're going to be every bit as hard-nosed about adhering to the law as the Delaware judges are, I tend to doubt, or at least hope, that they're not going to cut him any slack because "He's ELON!" He seems to want judges to be on his side because he's rich, and he's finding out in many cases that judicial systems don't seem to work that way.
Bear in mind that Elon did not invent Tesla. The guys who invented the Tesla Roadster incorporated in Delaware in 2003 for tax purposes and it's easy to incorporate there. The Muskbrat was an early large investor, and eventually effectively turfed the inventors and seized the company. Ever since then, he's more or less run the company as his personal fiefdom since then. He's stuffed the board with friends and family, there's little chance they'll gainsay him on any significant issue. Anything that actually comes to a stockholder vote? Well, we'll see about that.
To give you an idea of how popular it is to incorporate in Delaware, here's this little bit of tid: "The Delaware government says that over 68 percent of Fortune 500 companies are registered in the state, and 79 percent of US-based initial public offerings in 2022 were registered in Delaware." Yeah. Sort of says it all.
https://arstechnica.com/tech-policy/2024/02/elon-musk-proposes-tesla-move-to-texas-after-delaware-judge-voids-56-billion-pay/
no subject
Date: 2024-02-05 02:49 am (UTC)Right now, if a Cybertruck is sold for a $1000 profit in Florida, Tesla can charge itself a $1000 fee for using the Tesla trademark; zero taxable profit in Florida, and the $1000 isn't taxable in Delaware.
https://ilsr.org/how-chain-stores-evade-paying-state-taxes-and-what-do-about-it/
no subject
Date: 2024-02-05 03:04 am (UTC)I think he's setting himself up for a world of unknowns and trouble by changing his incorporation. But hey, he's brilliant because he's a billionaire! NOTHING can go wrong!
Well ...
Date: 2024-02-05 06:14 am (UTC)He's only doing what capitalism tells him is virtuous to do, which is suck in as much wealth as possible. I don't think society has any grounds to complain.
Sure he's a greedy asshole, but if society tells people that's a good think, they should not bait-and-switch to criticize greedy assholes.
no subject
Date: 2024-02-05 12:02 pm (UTC)and he's finding out in many cases that judicial systems don't seem to work that way.
He needs to take all his cases to the Supreme Court. They LOVE money there. :o :o :o
Hugs, Jon
no subject
Date: 2024-02-05 02:44 pm (UTC)Probably siphoning money from oil deeds and royalties, I don't know. They certainly don't spend it on their power infrastructure.
no subject
Date: 2024-02-08 02:10 am (UTC)no subject
Date: 2024-02-07 06:46 am (UTC)no subject
Date: 2024-02-07 07:05 am (UTC)There was an episode of the original Get Smart where Max is captured by Siegfried and taken to KAOS HQ, and outside there's a sign that says KAOS, A Deleware Corporation. Max says 'A Delaware corporation?' Siegfried shrugs his shoulders and says 'It's for tax purposes.' Yep, VERY common.
no subject
Date: 2024-02-09 08:24 am (UTC)no subject
Date: 2024-02-12 09:57 pm (UTC)But who holds the actual power? The Tesla board is largely either in his thrall, or a relation of some sort.