What did Elon Musk get from DOGE – and what's next?
Elon Musk may have resigned from the Department of Government Efficiency, but few believe he's stepping away from power. In under a year, DOGE brought Silicon Valley-style disruption to Washington, consolidating federal data and dismantling oversight. Now, Musk is expected to channel what he gained into a private AI venture – with public systems still in reach.
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Al Jazeera
44 minutes ago
- Al Jazeera
What is the ‘revenge tax' in the US tax bill?
Tucked within the proposed 'Big Beautiful Bill', the more than 1,000-page tax and spending overhaul that United States President Donald Trump wants to see enacted in law, is a provision that is being referred to as a 'revenge tax'. The 'Enforcement of Remedies Against Unfair Foreign Taxes' in Section 899 targets countries that the Trump administration believes impose unfair or discriminatory taxes on US companies and individuals, and will allow the US to impose additional taxes on entities from those countries. The provision calls, for instance, for levies on revenue from digital services, such as data monetisation and online advertising. The proposal also includes a higher minimum tax on the profits of foreign entities, even if those profits are earned outside US borders. This could impact passive income streams, such as interest and dividends, and may discourage international investors from countries flagged as discriminatory. The administration's unpredictable approach to global economic policy has already created uncertainty in international markets. Should this measure be signed into law, it could further erode foreign investor confidence in the US market. 'This revenge tax move will add to economic uncertainty. It will stop foreign CEOs from investing – the very thing President Trump says he wants. It means more wild economic swings, stock market declines, less stability and a greater chance of recession this year,' Stuart Mackintosh, the executive director of the financial think tank Group of Thirty, told Al Jazeera. 'Every few days, we see a destabilising misuse of US power, more self-inflicted wounds, that look set to drive up prices and slow the economy. America has shredded its political and economic alliances. These revenge taxes underscore that America cannot be trusted.' Under the provision, certain foreign governments and international businesses could face an additional 20 percent tax, which would apply to non-US entities earning income from US sources, including interest, dividends and royalties. Taxes would be hiked gradually at the rate of 5 percent annually. It would also affect profits earned at US locations, which are transferred to foreign parent companies, as well as income from the sale of US real estate by designated 'bad actors'. Trusts, global foundations and partnerships with passive income could also be impacted. However, exceptions are built into the legislation for foreign pension funds and charitable organisations. The tax would only apply to countries designated as 'discriminatory' by the US Treasury Department. Countries not flagged would remain unaffected. House of Representatives Ways and Means Committee Chairman Jason Smith, a Republican from Missouri, said that while the provision could serve as an effective retaliatory tool, it 'will hopefully never take effect'. According to the nonpartisan Joint Committee on Taxation, the measure could bring in revenue of $116.3bn over the next decade. But it would also lower tax revenue in the long term, by $12.9bn in both 2033 and 2034. The administration's shifting trade strategies have already led to legal battles, policy reversals and a climate of unpredictability that has left companies hesitant to make long-term plans. Companies like toy manufacturer Mattel and automaker Stellantis have suspended financial guidance due to the volatile nature of US tariff policy. These policies have also contributed to swings in consumer confidence. When Trump announced his series of sweeping tariffs against trade partners on April 2, which he dubbed 'Liberation Day', confidence fell to a 13-year low, only to rebound after the administration paused the tariffs' implementation. Analysts warn that provisions like the 'revenge tax' could deter foreign investment and strain developing partnerships. 'If you've got the headwinds of an extra withholding tax that starts at an extra 5 percent [and] moves up to 20 percent over the subsequent four years, I think [investors would] have second thoughts. In terms of optimising your investment strategy, you'd have a slightly smaller allocation to the US,' Chris Turner, the global head of markets and regional head of research for the United Kingdom and Europe at ING, a financial services company, told Al Jazeera. There is already evidence that some economies have started diversifying away from the US. Canada, for example, has increased trade with Europe and Asia. Trump's trade policies have also been cited as a factor in foreign governments divesting from US treasuries, while the European Central Bank continues to promote the euro as a competing global reserve currency. This measure adds another mechanism to the Trump administration's broader trade strategy, which has relied heavily on tariffs even as many face legal scrutiny. Last week, the US Court of International Trade blocked the administration's blanket global tariffs enacted under the 1977 International Emergency Economic Powers Act. A federal district court temporarily halted the block's enforcement as legal battles unfold. Experts believe many of these tariffs may not withstand judicial review. 'There's no statute that provides the president that authority', to impose sweeping international tariffs through the International Emergency Economic Powers Act, Greg Shaffer, a law professor at Georgetown University, told Al Jazeera. 'And as the court said, if there were such a statute, it would be unconstitutional because the Constitution provides that responsibility to Congress.' However, the ruling did not address tariffs on aluminium, steel and automobiles, which fall under a different legal basis – the 1962 Trade Expansion Act. Under that statute, Trump recently announced plans to raise those tariffs to 50 percent for most imports.
Al Jazeera
5 hours ago
- Al Jazeera
‘Disgusting abomination': Why is Elon Musk slamming Trump's budget bill?
Billionaire Elon Musk has lashed out at United States President Donald Trump's budget bill, describing it as a 'disgusting abomination', less than a week after he left the administration and at a time when the legislation is expected to come up for voting before the Senate. The so-called 'One Big Beautiful Bill' passed in the House of Representatives in late May has come under increasing scrutiny not just from opposition Democrats but from sections of conservatives, including a handful of Republican senators, and Musk. Musk, who headed the Department of Government Efficiency (DOGE), set up by Trump to cut waste in public spending, left the administration on May 29. He had criticised the bill a day before his stint in government ended, but in much more muted language than the words he used on Tuesday. But why is Musk so opposed to the bill, why is the legislation so important to Trump, and how does it square with the president's other stated fiscal priorities? 'I'm sorry, but I just can't stand it anymore. This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination,' Musk wrote on X, the social media platform he owns. 'Shame on those who voted for it: you know you did wrong. You know it.'In another post, Musk wrote, 'Mammoth spending bills are bankrupting America! ENOUGH.' The world's richest man continued his tirade against the bill on Wednesday. 'This immense level of overspending will drive America into debt slavery!' he wrote on X. Musk claimed the bill would 'massively increase the already gigantic budget deficit to $2.5 trillion'. The US government's budget deficit has been rising. It stood at $1.83 trillion in the 2024 fiscal year, according to the Department of the Treasury. This is not the first time that Musk has criticised the 'One Big Beautiful Bill', even mocking its name in a television interview in late May. 'I think a bill can be big or it can be beautiful. But I don't know if it can be both. My personal opinion,' Musk told CBS journalist David Pogue on May 27. He added that he was 'disappointed to see the massive spending bill'. At DOGE, Musk was tasked with slashing US government infrastructure – a mandate that saw his team push through a significant culling of the federal workforce, with thousands laid off. The United States Agency for International Development (USAID), the government's foreign aid diplomacy arm, was also gutted, leaving critical public health initiatives, among others, struggling for survival in several emerging economies. In the interview with Pogue, Musk suggested that profligate government spending through the bill would undercut the gains made by DOGE in saving tax dollars. The 'One Big Beautiful Bill' is the centrepiece of Trump's legislative agenda and aims to deliver on a series of his campaign promises. It extends the tax cuts Trump introduced during his first term in office in 2017. At the same time, however, it earmarks funding for other priorities of the current administration. It sets aside, for instance, $46.5bn to continue work on constructing barriers along the US-Mexico border to stop migrants and refugees from entering the country. On social media, Trump has described the bill – characteristically, in all caps – as a 'WINNER' and as a 'BIG GROWTH BILL'. The bill carries financial – and many believe political – costs. To finance Trump's priorities, the bill in its current form would dramatically cut social security programmes that millions of Americans depend on. Funding for Medicaid subsidies will drop by $698bn, according to estimates by the non-partisan Congressional Budget Office (CBO). More than 71 million Americans were enrolled under Medicaid as of January 2025, according to government data. The programme offers health insurance to low-income Americans. The bill will also snip $267bn in funding for the Supplemental Nutrition Assistance Program (SNAP), better known as food stamps, according to the CBO. An estimated 41 million Americans used food stamps in 2024. Many critics of the bill have said these cuts leave the most vulnerable Americans even more exposed to healthcare crises and food shortages. But others, especially at the conservative end of the political spectrum, have pointed to how the bill will further bloat the country's debt. The current US federal debt limit stands at $36.1 trillion, set on January 2, 2025. But that gives the government no leeway to borrow any more, since the federal government is currently $36.2 trillion in debt. The new bill proposes raising the debt ceiling by $4 trillion. That has angered some Republicans. Rand Paul, a Republican senator from Kentucky, on Tuesday backed Musk's criticism of the bill. 'I agree with Elon. We have both seen the massive waste in government spending,' Paul wrote on X. 'We can and must do better.' Paul has said he will try to block the bill in its current form in the Senate, where Republicans have a razor-thin majority. In the House, the bill passed with 215 votes in favour, and 214 against: all Democrats voted against it, joined by two Republicans, Thomas Massie of Kentucky and Warren Davidson of Ohio. Yes, in many ways, the bill's proposal to raise the debt ceiling contradicts another Trump campaign promise – to cut debt. DOGE was set up with that in mind, and the Trump administration has justified slashing foreign aid by arguing that it would curb US debt. Trump has also argued that the tariffs he has imposed – and wants to impose – on a range of countries and goods will help the US trim its debt, though many economists have challenged the logic behind that claim.
Al Jazeera
5 hours ago
- Al Jazeera
Why ‘Kill the Boer' still echoes: It's not hate, it's hunger for justice
On May 25, Julius Malema, the firebrand leader of South Africa's Economic Freedom Fighters (EFF), closed his campaign rally at the Mminara Sports Ground in Kwakwatsi, Free State, as he often does: by singing his favourite anti-apartheid struggle anthem, 'Dubul' ibhunu'. Sung in Xhosa, the song translates to 'Kill the Boer' or 'Kill the farmer' and has long sparked controversy in South Africa and abroad. In recent weeks, the controversy has flared up once again. Just four days earlier, on May 21, during a tense meeting at the White House with South African President Cyril Ramaphosa, United States President Donald Trump played a video of Malema and his supporters chanting the song. He claimed it was proof of a 'white genocide' in South Africa and demanded Ramaphosa explain 'that man's' conduct. Yet Malema has been singing this song publicly since 2010. There is no white genocide occurring in South Africa. In fact, in August 2022, the country's Equality Court ruled that the song does not constitute hate speech. By performing it again in Kwakwatsi, Malema was clearly seizing an opportunity to capitalise on Trump's misleading allegations and the global media attention they brought. The disproportionate attention granted to Malema by Trump and his ally Elon Musk obscures a deeper, more urgent reality: millions of Black South Africans, like many across the continent, are crying out for meaningful socioeconomic change and long-overdue justice for the enduring legacies of colonialism and apartheid. They are calling for a modern revolution. Nothing illustrates this more than the EFF's platform. Its policies centre on economic transformation, including land expropriation without compensation and the nationalisation of mines. The party embraces Black nationalism and pan-Africanism, supports Russia in its standoff with NATO, and positions itself in opposition to perceived Western dominance. While the EFF's agenda is bold and Afrocentric, it is hardly new. Decades before the EFF's founding on July 26, 2013, the Pan Africanist Congress of Azania (PAC), a radical anti-apartheid movement, championed many of the same ideals. Founded on April 6, 1959, by a group that split from the African National Congress (ANC), the PAC was led by Robert Sobukwe, an intellectual, pan-Africanist, and activist. At the party's launch, Sobukwe famously said, 'The Africanists take the view that there is only one race to which we all belong, and that is the human race.' The PAC advocated for the return of land to Indigenous Africans, asserting that it had been unjustly seized by white settlers. This view – that land dispossession lies at the heart of South Africa's historical injustice – has only recently begun to be addressed by the ANC through the Expropriation Act 13 of 2024, signed into law by Ramaphosa on February 23. South African history is rich with visions for African renewal. Sobukwe's philosophy laid the groundwork for what is often mischaracterised today as 'radical economic transformation'. Steve Biko's Black Consciousness Movement in the 1970s instilled pride and self-determination. In the late 1990s, President Thabo Mbeki championed the African Renaissance – a cultural, scientific, and economic revival aimed at decolonising African minds and institutions. Malema is not a theoretical pioneer, but he is a potent political vessel for the ideas long espoused by Sobukwe, Biko, and Mbeki. Much like elsewhere on the continent, South Africans are revisiting the question of land. It signals a broader resurgence of postcolonial ideology. In 1969, Muammar Gaddafi provided a powerful example. He nationalised Libya's Western-owned oil companies to uplift the impoverished. Over a decade, Gaddafi provided free education, healthcare, and subsidised housing, giving Libyans Africa's highest per capita income. In 2000, Zimbabwe launched its land reform programme to reclaim land taken during colonial rule. In more recent examples, Burkina Faso nationalised the Boungou and Wahgnion gold mines in August 2024 and plans to take over more. Mali reclaimed the Yatela mine in October. In December 2024, Niger seized control of the Somair uranium mine, previously run by French nuclear giant Orano. Across Western and Southern Africa, it is clear: the legacy of colonialism still demands redress. South Africa remains the world's most unequal country. Its Gini coefficient, which measures income inequality, consistently ranks among the highest. Decades after apartheid's fall, systemic racial inequality persists, sustained by disparities in education, employment, and economic access. Trump's astonishing decision on February 7 to sanction South Africa – partly over the Expropriation Act – reveals the West's historical amnesia and indifference. Many Black South Africans are desperate to move beyond the past, but are continually thwarted by a refusal to correct entrenched inequality. Ironically, Trump's intervention may serve to galvanise African governments. His public posturing may appeal to his domestic base, but his tone-deafness will only deepen anti-US sentiment among South Africans. Anti-Western feeling is already rising across the continent, fuelled by historical grievances, neocolonial policies, and the emergence of new global powers like Russia and China. This disillusionment is visible in the rejection of Western-backed institutions and a growing appetite for alternative partnerships. Instead of attempting to shame Ramaphosa on the world stage, Trump would do better to support equitable and lawful reforms. Obsessing over Malema is futile – he is merely the voice of a generation grappling with economic pain and historical betrayal. 'Dubul' ibhunu' resonates among parts of South Africa's Black population not because they are bloodthirsty, but because the promises of liberation remain unfulfilled. Trump would do well to understand this: the revolution in Africa is not over. The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial stance.
