Kevin O'Leary discloses the factors that prompted Musk's criticism of Trump's budget proposal
The chaotic clash between President Donald Trump and tech tycoon Elon Musk has intensified, with the latter continuously excoriating the Trump-backed spending bill on Twitter, labeling it bloated, irresponsible, and detrimental to the nation's financial health.
Now, the chairman of O'Leary Ventures and 'Shark Tank' star, Kevin O'Leary, has joined the fray, shedding light on reasons behind Musk's fiery criticism. According to O'Leary, it all boils down to a chart shared by Sen. Ron Johnson, R-Wis., that undeniably shocked Musk.
"Ron Johnson put out a graph a few days back. It's a simple one, folks. Basically, it shows that even during Trump's first term, deficits were under a trillion dollars. Then, we encounter this pandemic, and subsequent administrations and budgets post-pandemic have $2 trillion-plus deficits," O'Leary shared on "The Evening Edit"on Thursday.
Musk's impassioned rebuke of the bill, already passed by the House and awaiting Senate vote, has centered on its astronomical price tag and the national debt escalation it would trigger. He's been outspoken online.
"I've reached my tipping point, folks! I just can't stomach it anymore. This bloated, shocking, pork-laden Congressional spending bill is downright repugnant. Shame on those who voted for it. You know you messed up," Musk barked on Twitter.
The national debt currently stands at a staggering $36 trillion. While the bill promises $3 trillion in tax cuts for Americans, it's projected to add $2.4 trillion to the deficit.
Beyond the headline numbers, O'Leary highlights another provision in the bill causing consternation, especially among business leaders and legislators.
"One of the tweaks being debated that's causing some concern, particularly among senators and business heads, is this idea of giving the IRS the authority to audit businesses for nine years that claimed ERC tax credits," insisted O'Leary. "That's a tough sell, so I'm sure they'll work on that language."
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The controversial provision in the "One Big Beautiful Bill Act" causing anxiety among senators and business leaders revolves around the Employee Retention Credit (ERC). This provision includes a few key elements:
- Retroactive Disallowance of ERC Claims: The bill invalidates all ERC claims filed after January 31, 2024, even if they were submitted before statutory deadlines. This affects any claims made after that date, including those filed up to April 15, 2025, which was the final deadline for 2021 tax periods.
- Extended Statute of Limitations: The IRS would have six years to audit ERC claims instead of the current three or five years, depending on the quarter being claimed. This extended period could result in audits and potential adjustments or denials up to nine years after the credits were taken if the six-year statute of limitations is applied retroactively.
- Penalties for ERC Promoters: The bill proposes steep penalties for individuals or businesses that provide services related to the ERC, charge contingency fees, or receive substantial revenue from such services. These penalties are retroactive to March 12, 2020, and include fines up to $200,000 per violation for businesses.
These provisions concern business leaders due to the potential for increased audits and penalties, which could lead to financial burdens for companies that have already claimed these credits. The extended audit period and stringent penalties are particularly controversial, as they could lead to prolonged uncertainty and financial risk for businesses that have relied on the ERC to support their operations during the pandemic.
- Elon Musk's criticism of the Senate's spending bill is rooted in its astronomical price tag and the national debt escalation it would cause, as the national debt currently stands at a staggering $36 trillion.
- The bill is projected to add $2.4 trillion to the deficit, while promising $3 trillion in tax cuts for Americans.
- One of the bill's provisions causing concern among business leaders and legislators is the idea of giving the IRS the authority to audit businesses for nine years that claimed ERC tax credits.
- This provision includes retroactive disallowance of ERC claims filed after January 31, 2024, even if they were submitted before statutory deadlines.
- The IRS would have six years to audit ERC claims instead of the current three or five years, depending on the quarter being claimed, which could result in audits and potential adjustments or denials up to nine years after the credits were taken.
- The bill proposes steep penalties for individuals or businesses that provide services related to the ERC, charge contingency fees, or receive substantial revenue from such services.
- These penalties are retroactive to March 12, 2020, and include fines up to $200,000 per violation for businesses.
- The escalating costs of the bill, along with the controversial ERC provisions, have also caught the attention of the sports-betting industry, given the close ties between American football, such as NFL and NCAA football, and the national economy, as well as the general-news media, crime-and-justice sectors, and politics.
