Billionaire Elon Musk is calling for major tax changes as Donald Trump nears his second presidency.
“The tax code needs drastic simplification,” Musk wrote in a post on social media platform X, formerly Twitter, which he owns.
Musk’s comment came in reaction to a statement from X account @TheRabbitHole84 revealing that America’s federal tax code has more than 73,000 pages.
Newsweek reached out to Musk for comment via email.
Why It Matters
Musk has been closely tied to Trump’s campaign, and the president-elect has tasked Musk, along with Vivek Ramaswamy, to lead the new Department of Government Efficiency (DOGE).
As a result, Musk could have a major role in crafting new government policy, including when it comes to taxes. He previously said on X that simplifying the tax code would “increase productivity” instead of “incentivizing bizarre tax-avoidance behavior.”
What To Know
Trump centered his campaign and first presidency around reducing taxes for Americans and getting rid of government inefficiency.
The current tax code has thousands of pages of rules, and a simpler tax code could mean fewer government employees would be needed to process returns. This would in turn save the government money in the long run.
It also means Americans could see a federal flat tax rate, with only a few tax levels based on income. Today, there are seven tax brackets. However, if the tax code is simplified, Americans could also lose certain deductions and credits that benefit low-income families or people experiencing high medical costs.
Deductions helping those with mortgage interest, homeownership and student loan interest could also be removed.
Republicans are working to lower taxes in Trump’s second administration. If passed, the cuts would substantially favor large corporations and the wealthy.
What People Are Saying
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek:“While the topic of whether to increase or decrease taxes on different segments of Americans is always one both parties will debate over, there could be some bipartisan appeal in simplifying the federal tax code.
“There are tens of thousands of pages of rules implemented over the years that have complicated federal taxes to such a degree that few Americans would dare to tackle their yearly submission alone without the help of an in-person preparer or virtual software service.”
What Happens Next
Beene said how the tax code would be simplified could vary based on what deductions or rules disappear.
“What rules would be eliminated and would those rules favor certain groups of Americans over others?” Beene said. “Musk’s call will undeniably have supporters, but until we find out just what from the tax code he is looking to cut, it’s hard to say how much backing it will gather.”
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