According to news, on July 5th local time,
Elon Musk, an American entrepreneur, posted on social media platforms that “The Party of America” was established.
It is understood that Musk first proposed this idea on June 5th. He initiated a vote among 220 million users on social media, asking whether it was “time for the United States to create a truly representative new political party that represents 80% of the middle class.” The results showed that over 80% of voters chose “Yes.”
Musk has repeatedly criticized Trump’s “big and beautiful” tax and spending bill.
Recently, Musk and President Trump have disagreed over the “big and beautiful” tax and spending bill.
On July 1st local time, the US Senate passed the “big and beautiful” bill introduced by President Trump and submitted it to the House. The bill text is 940 pages long, including
substantial cuts in tax rates, subsidies for new energy, and social security expenditures, as well as increases in military spending and border security expenditures.
The day before, Musk fiercely criticized the so-called “big and beautiful” tax and spending bill pushed by Trump, posting dozens of posts claiming those supporting the bill should feel ashamed. He stated,
if the bill passes, it will be established the next day as the “American Party.”
On social media, Musk wrote: “If this insane spending bill is approved, ‘The American Party’ will be established the next day.” He also said that the Democratic and Republican parties in the United States pretend to be two separate parties, “but in reality, it is just one ‘single party’. The United States needs alternatives.”
Moreover, Musk pinned a post saying, “Any Congress member who promised to cut government spending during the campaign but voted for the biggest debt growth bill in history will see themselves on posters during the midterm election’s primary stage next year.” The poster features Pinocchio, with explicit “liar” written underneath.
On the morning of that day, during a media interview, Trump discussed his “rivalry” with Musk. Trump stated that Musk’s attack on the “Bigger is Better” bill was due to the bill’s elimination of subsidies for new energy vehicles.
According to previous statements by American media, this would have a significant impact on Tesla. When asked if he would “evict Musk,” Trump said he needed to consider it and mentioned that perhaps the Department of the Treasury, which could be a “monster that bites its own tail,” might take on Musk. He also emphasized that Musk had “received a lot of government subsidies.”
It is worth mentioning that on the same day, Tesla’s stock price plummeted by more than 5%.
On July 4th, local time, President Trump signed the “Bigger is Better” tax and spending bill, making it effective. Previously, the bill had passed the U.S. House of Representatives with a vote of 218 in favor and 214 against.
Hours before the bill was signed into law, Musk once again posted on social media about establishing a new political party called “The Party USA.” In the approximately 1.249 million online votes received, 65.4% of netizens supported the establishment of the new party.
The wealthy class in the United States benefited the most.
Tax reductions for business owners have always been a policy position of Trump. A real estate developer, he implemented a large-scale tax reduction policy during his first term. In 2017, the Trump administration introduced the “Tax Cuts and Jobs Act,” significantly reducing the federal corporate income tax rate from 35% to 21%. The “Bigger is Better” bill has permanently fixed this tax rate.
Based on this, the “Bigger is Better” bill also expanded many tax incentives. One of the most important provisions is that research and equipment investment can be “fully deducted,” meaning that the cost of updating production equipment and researching new products can be fully offset against taxable income.
Moreover, the bill also expanded the scope of tax exemptions for “Direct Access to Businesses.”
The so-called “Direct Access to Enterprises” refers to the fact that actual controllers can penetrate into small businesses owned by individuals. For such enterprises, the Trump administration exempts from corporate income tax, allowing the actual controller to pay taxes only on personal income after distributing corporate profits, thus avoiding the hassle of “double taxation.”
However, despite the general profitability for the wealthy class, Elon Musk has become an “exception”—
Due to the Trump administration nearly completely abolishing clean energy subsidies during the Biden era, Tesla currently enjoys a significantly reduced subsidy benefit.
Moreover, the market points out that what is more fatal for Tesla is that Trump directly set the standard for fuel pollution penalties in the automotive industry at zero, meaning traditional fuel vehicle companies no longer need to purchase “carbon credits” from Tesla to offset fines. In the first quarter of 2025, Tesla’s carbon credit sales revenue reached $595 million, exceeding its net income of $409 million; that is to say,
Without this income, Tesla would be in the red
The company’s global revenue from this source was $2.8 billion, higher than $1.8 billion in 2023 and accounting for 39% of its $7.1 billion annual net income. Since 2015, the company’s revenue from this source has exceeded $11 billion.
In addition to selling cars and carbon credits, Tesla also produces its own batteries, operates a network of about 2,600 American electric vehicle superchargers, manufactures solar roof tiles, and commercial and residential battery storage packs. However, almost all these businesses will lose important federal support or tax incentives, except for the storage subsidy which remains effective. Particularly damaging is the cancellation of the $7,500 federal tax credit for purchasing and leasing certain electric vehicles at the end of September.
An insider stated that on average, up to three-quarters of the profits come from the United States, with the rest coming from similar systems in the EU and Asia.
A former executive of Tesla stated: “This is a terrifying policy, which is devastating to Tesla’s profits.”
He added: “Elon has finally woken up, but it’s too late.”