Revenge Tax: Inside Trump's Policy that Ignited Feud with Elon Musk
- American billionaire Elon Musk criticised President Donald Trump's 'Big Beautiful Bill' on spending and tax overhaul
- Inside the bill is the “Enforcement of Remedies Against Unfair Foreign Taxes”, which targets countries imposing unfair taxes on US firms
- Dubbed the 'Revenge Tax', the proposed bill seeks to impose up to 20% tax on these companies as it seeks to protect America's multinationals
Wycliffe Musalia has over six years of experience in financial, business, technology, climate, and health reporting, providing deep insights into Kenyan and global economic trends. He currently works as a business editor at TUKO.co.ke.
US president Donald Trump and Tesla Inc. owner Elon Musk are not on good terms, days after the former exited his role in the government.
Source: Getty Images
Musk announced his exit from the Department of Government Efficiency (DOGE) in late May, saying the 130-day task was over.
However, Trump faulted Musk, saying that he fired him.
The world's richest man expressed his reservations over Trump's comprehensive tax spending cut package under the "Big Beautiful Bill".
What's contained in Trump's tax bill?
Inside the Big Beautiful Bill, is the “Enforcement of Remedies Against Unfair Foreign Taxes”, which has been nicknamed 'Revenge Tax'.
According to reports, the tax will allow the US government to impose additional charges on multinational companies from countries it deems unfair in charging American firms.
Bloomberg reported that the 20% tax will be imposed on revenue from digital services and also includes a higher minimum tax on the profits of foreign companies.
If passed into law, the tax will apply to non-US entities earning income from US sources and will be increased gradually at 5% per year.
The Trump administration targets to collect $116.3 billion (KSh 15.03 trillion) revenue from the tax in the next ten years.
According to analysts, the bill must have been informed by US big tech seeking to retaliate against foreign nations that charge digital services taxes
What Trump said about Musk's rejection of the bill
Musk criticised the bill, a move that has caused a negative altercation between him and Trump.
The Republican president threatened to cancel all government deals that were extended to Musk during his tenure as the head of DOGE.
He said the US government would save billions of dollars by halting funding to SpaceX and other firms owned by the tech billionaire, describing the move as "the easiest way to save money in our budget, billions and billions of dollars."
He faulted the former administration for failing to terminate the deals.
What to know about Elon Musk and Trump
- Musk and Trump's feud escalated throughout Thursday, with both men taking it online, exchanging sharp remarks via their personal social media platforms.
- Reports indicated that Trump could offload the Tesla electric vehicle he bought for $80,000 (KSh 10.3) following the fallout with Musk
- The American billionaire shared damaging information that could cause trouble in President Donald Trump's administration
Proofreading by Asher Omondi, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
