The budget proposal of US President Donald Trump has once again received harsh criticism from his former right-hand man, Elon Musk. According to the Tesla CEO, Trump’s plans are very bad and will result in the loss of millions of jobs in the United States.
Trump has bundled his financial plans into what he himself calls a “one big beautiful bill.” For example, he is introducing a series of tax cuts, for example on tips and overtime, and with additional spending on defense and limiting immigration.
On the other hand, fewer Americans will have access to government food and healthcare programs. Furthermore, Trump wants to phase out support for projects in the field of sustainable energy.
The latter is an important reason for Musk’s criticism, who invests a lot of money in clean energy. On his own platform X, he called Trump’s plans “completely insane.”
The critical tone of the richest person on earth is striking, because he was the main financier of Trump’s presidential campaign. Musk donated about 250 million dollars (213 million euros).
But the president’s budget plans are causing the close relationship between the two to cool. A fierce argument arose between the two on social media earlier this month. Musk reproached Trump, among other things, for letting the American economy fall into recession. Trump stated that Musk was crazy. Later the tone became slightly more moderate.
Too much support for old industry
Yet Musk lashed out again last weekend. He stated that the budget plans “destroy millions of jobs in America and cause immense strategic damage to our country. It gives aid to industries of the past, while causing much damage to industries of the future.”
The comments came just before the US Senate decided that Trump’s budget proposal could be considered. 51 of the 100 senators voted in favor.
This does not mean that a majority of senators also approve of the plans. There was only a vote on whether to consider it. Changes are expected to be made before the proposal is eventually approved.
If that happens, the House of Representatives also has to look at it. Although the House already agreed earlier, it has to make a decision again in the event of major changes. Trump said earlier that he hoped that the entire legislative process would be completed on July 4, a national holiday in the US. Whether that will be achieved is questionable.
Trump has partly accommodated his critics. A feared tax for foreign investors, also known as the ‘revenge levy’, has disappeared from the plans.
It would have given Trump the opportunity to levy tax on returns that foreign companies and individuals make on American investments. This did not so much concern capital gains, but for example returns on real estate investments or interest received on bonds. Many feared that this would deter foreign investors, but this measure has therefore been removed.
On the other hand, the US does not have to adhere to a global minimum tax. This measure was created a few years ago and is intended to prevent companies from evading taxes by establishing themselves in another country. Trump was not happy with it and has now been exempted from it by the G7, an alliance of major Western countries.