Dan Ives on Musk's $1 Trillion Texas Problem: Why Florida Won't Help

SpaceX shares fell 12% over the past month to about $143, and one of Wall Street's best-known Tesla (NASDAQ:TSLA) bulls says Elon Musk cannot solve his Texas problem by leaving the state. Dan Ives, speaking on The Pomp Podcast after the midterms, put the constraint in one line: "He can't just pick up and go to Florida."

His reasoning centers on scale. "SpaceX needs to build themselves into a hyperscaler and Texas is a key part of it," Ives said, adding that Musk "is going to have to, I think definitely olive branch a bit" with the state's incoming leadership. A hyperscaler, in this context, is a company operating computing infrastructure at the scale of Amazon or Google.

The stakes are enormous. Terafab, a Texas chip plant that Tesla and SpaceX are building together, targets 1 million wafers a month, and Musk himself estimates it could cost $1 trillion. SpaceX also wants a gas-fired power plant and supercomputer at Starbase, with a first phase estimated at $24 billion. That project still awaits a tax decision from Starbase's city commission.

What changed after the midterms?

On Nov. 7, Musk posted on X that "SpaceX and Tesla have prospered in Texas, because we were not constantly operating under an oppressive and extractive state government." The post signaled friction with Texas politics at precisely the moment Musk's capital plans require the state's cooperation.

Investors have already marked down the risk. Beyond the 12% drop in SpaceX (NASDAQ:SPCX) shares, board member Donald Harrison resigned one day after the elections. Tesla slipped less than 1% over the same month, though it remains down 16% this year.

The takeaway: Musk's public grievance with Texas collides with nearly $1.05 trillion in planned physical assets that cannot relocate.

Why does the tax math favor staying?

Ives has the arithmetic on his side, and the numbers explain why. Texas voters approved Proposition 4 in 2019 with 77% support, which means any future state income tax now requires a two-thirds majority in the legislature. Florida has no personal income tax either.

That symmetry makes relocation pointless as a tax move. Moving from Austin to Miami would not lower the state income tax Musk owes on his pay, including the stock compensation linked to Tesla's 2025 CEO Performance Award. Both rates are zero, so the savings are zero.

Property is even less portable. Texas taxes business property in the local taxing unit where it has "taxable situs" — meaning where it physically sits. A fab and a power plant remain in Texas no matter where their owner lives. Leaving would cost Musk political good will and save him nothing.

The plain reading: an address change moves the man, not the assets, and the assets are the entire problem.

Does the same logic apply to everyone?

The article extends the analysis to any taxpayer weighing a move to cut taxes. Savings equal the rate gap between two states, applied only to income that actually travels. States can still tax nonresidents on income sourced within their borders; California, for example, taxes residents on all income but nonresidents only on California-source income.

The illustrative numbers show the contrast. A remote worker making $150,000 who leaves a state with a 5% flat income tax for one with no income tax saves $7,500 a year. Selling her $400,000 home costs about 6% in fees, or $24,000, and moving adds another $10,000. She breaks even in about 4.5 years and comes out $41,000 ahead after a decade.

The Texas-to-Florida version collapses. The rate gap is 0%, the annual savings are $0, and the full $34,000 in moving costs is a permanent loss. The result is equally bad when income stays tied to the old state, such as an on-site job or equity awards earned there — the old state keeps its claim, and savings shrink toward zero.

In short: a relocation only pays when both the rate gap and the income actually move.

How should readers run the numbers?

The source lays out a four-step checklist:

• Find your real rate gap. Use both states' current brackets from their revenue departments and apply them to your actual taxable income. If both rates are zero, there is no income tax savings to capture.
• Separate portable income from fixed income. Remote salary moves with you. On-site work, a local business, rental property and unvested stock earned in your old state may still be taxed there.
• Ask payroll how equity will be allocated. Stock that vests after a move is often split between states by days worked in each. Get that split in writing before setting a moving date.
• Count every switching cost. Include home sale fees, moving expenses, higher insurance and property taxes, then divide the total by annual savings to get your break-even period.

The checklist matters because moving costs are certain while tax savings are often smaller than assumed.

What happens next?

The next concrete signal is procedural, not rhetorical: how Starbase's city commission rules on the $24 billion power plant tax decision under Texas's incoming leadership. Until that ruling lands, Musk's leverage rests on projects he has already anchored in Texas soil — and every party knows it.