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AI employees don't pay taxes

alec.is

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Re: AI employees don't pay taxes

#121

Post by joquarky »

kridsdale1 wrote: post #51
paxys wrote: post #36

The article and the entire "AI will take all our jobs" doomer moment is idiotic. No one is losing their job to AI and no one will lose their job to AI in the long term without better jobs opening up in their place, same as every single technological innovation in history. But humoring the author for a moment, and taking their argument to the extreme - let's say AI does take the majority of jobs, and taxes on human pr…

My wife quite literally lost her job (extremely high annual review scores for ten years) explicitly due to AI. A reorg happened and the new people said they were closing her whole department because they think Copilot can do it.

I go to various meetups and frequently meet people who have had their jobs taken by AI. Paxys is living in a privileged bubble.

Journalism and transcription/translation jobs have been hit especially hard.

Re: AI employees don't pay taxes

#122

Post by AnthonyMouse »

BloondAndDoom wrote: post #67
Saline9515 wrote: post #25

Payroll taxes are inefficient as they discourage work and increase its cost for employers, leading to lower hiring. If payroll taxes vanishes because of AI, it doesn't mean that we should stop using it to increase productivity, but rather reorient taxes. For instance, land value tax or consumption taxes are often seen as more efficient and fair, depending on their implementation. They also are AI-proof.

Payroll taxes are the worst for small companies followed by strong labor law. Strong Labor laws are good if the company has 500-1000+ people but not able to fire someone within the month with reason is just dumb (I’m looking at Europe). It indeed causes many startups to hire 50% less people than they can. I honestly don’t understand taxing anyone making less than something like 500K. Don’t tax anyone earns less than…

> focus all tax collection to top 1%

Most of the "we should just get all the taxes from rich people" arguments ignore two fairly important things.

The first is how asset markets works, i.e. why rich people are rich. It's because there are finitely many assets and whenever anyone rich gets more money, they use it to bid up the prices. But that makes high taxes on rich people do something unintuitive at scale: It takes away the money that was making the stock market go up. And then not only do they have less money, they also have less income, because the people who would have paid them for their stock also have less money, which makes stock prices go down. Which means that increasing their tax rate from e.g. 25% to 50% doesn't generate anywhere close to twice as much revenue, and it also lowers the growth rate in the tax revenue you get from them. Which means that raising the rate will, in the long term, inherently generate less revenue. Whether you end up underwater in 48 months or 48 years depends on what the existing and proposed rates are and what the economy looks like, but there is always some period of time after which a reduction in the compounding rate is going to absorb any percentage increase in the tax rate. At which point you're paying the recurring costs and lower compounding rate from the higher tax rate indefinitely in exchange for no additional revenue, and indeed for less government revenue.

And the second is that Congress wants money to spend, so they're going to do the things that cause them to have more money to spend. Now imagine what kind of non-tax policies they're going to implement if the tax system makes it so the only way they get more money to spend is if they transfer wealth from the poor to the rich. We don't actually have an effective solution to the principal-agent problem, so perverse incentives are bad, right?

Re: AI employees don't pay taxes

#123

Post by _DeadFred_ »

Aerolfos wrote: post #38

Apart from being all AI-written: > Reality: It’s not fear; it’s math. If 30% of the workforce is displaced, and the remaining 70% have to pay for the social safety net (or UBI) required to keep the displaced alive, the math breaks. The argument being given simply avoids the question of where the economy itself is in all this. The workers pay taxes, the taxes pay for infrastructure, sure. But the workers aren't doing…

Billionaires (that REALIZE gains on their investments via loans based on the investments' current value and not the original value)and AI Companies are about representation without taxation, while those that are taxed get their voice drowned out by those same actors.

Re: AI employees don't pay taxes

#124

Post by tomrod »

AnthonyMouse wrote: post #110
Aerolfos wrote: post #38

Apart from being all AI-written: > Reality: It’s not fear; it’s math. If 30% of the workforce is displaced, and the remaining 70% have to pay for the social safety net (or UBI) required to keep the displaced alive, the math breaks. The argument being given simply avoids the question of where the economy itself is in all this. The workers pay taxes, the taxes pay for infrastructure, sure. But the workers aren't doing…

> Which means there's less workers being paid, less taxes, less money to be spent on the economy, which means less money to pay workers, which means... the logical conclusion is "no economy at all". Except that's not how the economy works. Suppose you automate web development. Fewer people get paid for that anymore. Does it increase long-term unemployment? Not really, because it creates surplus. Now everybody else ha…

Your implicit assumption with the web dev is that this scales. Unfortunately, that may not be the case.

Re: AI employees don't pay taxes

#125

Post by joquarky »

toss1 wrote: post #78

The solution is to stop taxing human labor/income and to start taxing every financial transaction, from buying a piece of candy, a computer component, a service, a house, a data center, or a share of stock, etc. Just the volume of Equities + TRACE fixed income/structured + munis + real estate is over $200Trillion. A mere 3% tax on those would put the $6T US budget in large surplus. Add $1.7 Quadrillion of ovrerall pa…

Also gains on sales of things like stocks and commodities should be taxed proportionally to how briefly they are owned, with an asymptote approaching 100% for HFT.

And no basis reset upon inheritance.

Re: AI employees don't pay taxes

#126

Post by lesser-shadow »

kmoser wrote: post #21

> Reality: It’s not fear; it’s math. If 30% of the workforce is displaced, and the remaining 70% have to pay for the social safety net (or UBI) required to keep the displaced alive, the math breaks. What evidence does the author have that 30% of the workforce will be displaced (not to mention unable to find another job)? The author also doesn't seem to take into account that AI is also making new jobs: https://www.ec…

[dead]

Re: AI employees don't pay taxes

#127

Post by joquarky »

givinguflac wrote: post #62
reactordev wrote: post #10

Earlier quoted context omitted.

The Government can't put the genie back in the bottle. UBI won't work because economics. Taxes fund the government but what use is a government that cannot govern? What happens when AI is used as employees at all these companies? Is everyone a CEO now? Where does the value come from? Once you peel back the onion, all you get is tears.

“UBI can’t work because economics.” Where is your source? The data says otherwise. https://www.wbur.org/onpoint/2024/08/19/universal-guaranteed...

Look at the US tax system and tell me how UBI won't become just as convoluted.

Re: AI employees don't pay taxes

#128

Post by fooqux »

arm32 wrote: post #81
nospice wrote: post #60

Earlier quoted context omitted.

That sounds evasive. I share the parent's view that the article appears to be largely LLM-written. Given that you cite "your AI assistant", I'm guessing you did lean on an LLM here, perhaps without realizing that it imparted a very distinctive tone. And honestly, it just cracks me up that it's usually the authors writing about AI lean on the tech. Including the critics...

Busted. I am a human-in-the-loop. I think everybody should use LLMs to polish their language. This topic is important to me and I want to communicate as effectively as possible. I stand by every character of the article regardless of which fancy autocomplete I used to polish it. I use spellcheck, too, and a digital tuner for my guitar. Just want to reiterate: https://alec.is/posts/ai-employees-dont-pay-taxes/#:~:text…

I personally don't like using LLMs for doing anything creative, but I find it hilarious how if you're against AI for coding you're considered a Luddite by most in these parts. But blog posts? Now that's too far and you deserve to be lambasted.

I don't see anything wrong with what you've done.

Re: AI employees don't pay taxes

#129

Post by AnthonyMouse »

snuxoll wrote: post #77
gjsman-1000 wrote: post #41

Earlier quoted context omitted.

Do people with lower incomes have the entitlement to all benefits of the state without paying a fair share of their own? If anything, there’s plenty of literature showing that social programs and tax exemptions on the poor make underpaying them possible to begin with. Walmart couldn’t pay $12/hr. if tax exemptions and SNAP and other aid didn’t fill the gap.

We don't have go go to the extremes of employers that pay what is effectively poverty wages relative to cost of living. The household that brings home $80K/yr would always spend a larger percentage of their income on taxable consumption, than an executive that takes home multiple million per year. Progressive income tax brackets are a better tool for making sure those who are able to pay a larger share of the common…

> The household that brings home $80K/yr would always spend a larger percentage of their income on taxable consumption, than an executive that takes home multiple million per year. Progressive income tax brackets are a better tool for making sure those who are able to pay a larger share of the common good, do so.

"Progressive income tax brackets" don't actually do this. The people with so much money they can't spend it all use various tax shelters as it is. They typically manage to not even pay tax on the amounts they do spend, because they borrow money and spend it instead of recognizing it as income first. So they would be paying more under a flat consumption tax than they do under the status quo. The "progressive income tax system" doesn't actually work the way it's claimed to.

On top of that, the problem is essentially fake. People absolutely can and do spend millions of dollars a year. Cardiologists making seven figures buy huge houses with multi-car garages full of exotic makes etc. It's spending billions of dollars a year that nobody is really going to do, but that's such a tiny percentage of people that it's ridiculous to design a tax system being imposed on everybody else on the basis of that, and those are the exact people who aren't paying the high rates under the existing system anyway.

Here's a proposal: Have a flat consumption tax, and then have an income tax where the rate is 0% up to the 99.9th percentile income and only the top 0.1% even have to file a tax return. The latter is going to be avoided in the same ways it is now, but at least then you can't say the billionaires don't have a higher nominal rate, right?

Re: AI employees don't pay taxes

#130

Post by bathtub365 »

fooqux wrote: post #128
arm32 wrote: post #81

Earlier quoted context omitted.

Busted. I am a human-in-the-loop. I think everybody should use LLMs to polish their language. This topic is important to me and I want to communicate as effectively as possible. I stand by every character of the article regardless of which fancy autocomplete I used to polish it. I use spellcheck, too, and a digital tuner for my guitar. Just want to reiterate: https://alec.is/posts/ai-employees-dont-pay-taxes/#:~:text…

I personally don't like using LLMs for doing anything creative, but I find it hilarious how if you're against AI for coding you're considered a Luddite by most in these parts. But blog posts? Now that's too far and you deserve to be lambasted. I don't see anything wrong with what you've done.

At least many of the comments here still seem to be human written and so are much more interesting to read than the increasing number of AI written articles that get linked.
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