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AI employees don't pay taxes

alec.is

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Re: AI employees don't pay taxes

#171

Post by general1465 »

potatototoo99 wrote: post #19

The future will unironically be communism, and that's the best of possible worlds.

I absolutely agree. If AI takes over, most of the jobs are gone. If jobs are gone, income for consumers is gone. If income for consumers is gone, companies will disappear next because customers don't have money to buy goods and in final stage states will go bankrupt because it has no income from taxes because consumers and companies are gone.

Unless... there will be nationalization of AI companies or their massive taxation.

Re: AI employees don't pay taxes

#172

Post by general1465 »

jleyank wrote: post #74

In a consumer economy, people have to have the free cash to consume. Today, we call them workers. If they’re displaced, there’s going to be a hell of a lot of corporate taxes or trashed machines. I’d bet on the latter.

You are being downvoted by people who don't realize how money works. Without consumption, companies will cease to exist (rent, loans, energy). Without companies and consumption, taxes are gone and states are going bankrupt because it has still things like pensions, army or police to pay. And ultimately with whole consumption chain gone, those AGI valuation in Trillion of USD is zero, because nobody has money to afford to rent one.

Re: AI employees don't pay taxes

#173

Post by palmotea »

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". Taxes are the last thing to worry about then.

Assuming the hype pans out and we get AGI, the end result won't be "no economy at all," it'll be a really weird one that does nothing to satisfy the common man's needs (because they will be of no economic use to the owners of the technology).

All the world's resources will be harness to satisfy the whims of a very few trillionaires, and there will be no place for you (except perhaps as a cultish sycophant, if you're lucky)

Re: AI employees don't pay taxes

#174

Post by cal_dent »

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…

But that implicitly assumes all jobs are comparable financially. Sure there’ll always be jobs to do but x number of web devs or whatever is not the same as x numbers of nursing home care workers.

Also in terms of extra money and spending, the logic also breaks a bit because we know that by age cohorts, older cohorts have more money but tend to have less consumer spending than the 25 - 40 cohort.

Re: AI employees don't pay taxes

#175

Post by alecco »

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…

> Now everybody else has a little extra money

The flaw is assuming that lower costs “free up” money.

Money isn’t "freed". Money is created. Banks create it when they lend against future income. If automation removes wage income, banks don’t create replacement demand: they redirect credit into assets.

That’s why you can have rising productivity, stagnant wages, booming asset prices, and weak consumption at the same time. The missing variable is where credit is created, not how efficient production is. (Think Japan in the 90s)

If you think the AI threat is real buy real assets now. (not financial IOUs in computer systems)

"How Do Banks Create Money?" https://www.youtube.com/watch?v=3N7oD5zrBnc

Re: AI employees don't pay taxes

#176

Post by Jcampuzano2 »

joquarky wrote: post #113
Jcampuzano2 wrote: post #82

Earlier quoted context omitted.

Not taxing anyone under 500k would remove a very large share of tax revenue. Combining that with higher corporate taxes would be nice, but if it got pushed too high (which it would in this scenario) we would simply see corporate flight from the US to elsewhere or it would eliminate practically all the benefit of lower taxes from the less wealthy as the cost of goods would skyrocket. There isn't really a silver bullet…

> we would simply see corporate flight from the US Good. If they don't want to pay for the physical and legal infrastructure to make their business possible here, then they can go elsewhere. I'm so tired of this cowardly excuse.

It's not an "excuse". I'm just saying what would happen. I'm not against raising corporate taxes and patching loopholes. I just know there would also be unintended consequences for even the less wealthy that many don't consider.

Re: AI employees don't pay taxes

#177

Post by morkalork »

AnthonyMouse wrote: post #138
tomrod wrote: post #124

Earlier quoted context omitted.

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

It's not a matter of scale. If people don't have to spend as much on X then they end up with extra money and will spend it on Y. Jobs then shift from X to Y. This has been happening for centuries. The large majority of people used to work in agriculture. Now we can produce food with a low single digit percentage of the population. Textiles, transportation, etc. are all much less labor intensive than they were in the…

Look at any non-Western country with a massive population, how is their excess labour faring?

Re: AI employees don't pay taxes

#178

Post by toss1 »

Yodel0914 wrote: post #95
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…

I in principle agree, but it’s very hard to implement a progressive tax system if the basis is consumption (or “financial transactions”)

How not; wouldn't it be straightforward to have tax rate tables based on transaction size? E.g., transaction $1MM=0.5%, with restructuring payments to avoid taxes to carry heavy penalties.

Not many poor people will be making million-dollar+ transactions, and it seems like taxing ALL transactions will help make the rich pay their fair share, as their money tends to have low velocity relative to consumer goods, but they still do a lot of transactions.

EDIT: Also it should have zero taxes on necessities such as food & non-luxury clothing, similarly to how current state/local sales taxes work.

Also, if there is sufficient tax rate and income to do UBI to above poverty level, wouldn't the need for a progressive tax structure become obsolete?

Re: AI employees don't pay taxes

#179

Post by toss1 »

joquarky wrote: post #125
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.

YES!! I've long thought the tax rates on cap gains should be extremely progressive with holding time, ranging from 99%+ for sub-second holding (HFT) to sub 5% for decade+ holding periods. This would also effectively eliminate the utility of basis reset on inheritance, since the rate for multi-decade holding goes so low.

Also a great idea I saw recently is to treat any encumbrance of a capital asset as a realization event. For example, early investors in a company holding stock may have $millions in unrealized gains. Those gains are 'realized' and taxed on sale of the stock. However, if they take a loan using the stock as collateral, it is not taxed because there is a matching obligation to repay the loan and the stock ownership doesn't change (except in a default). Such loans should be taxed as a realization event, since they are pledging the stock at its current value, not its comparatively microscopic original purchase value.

Re: AI employees don't pay taxes

#180

Post by jrs235 »

AnthonyMouse wrote: post #167
twoodfin wrote: post #162

Earlier quoted context omitted.

You don’t have to have an enormous amount of stored wealth to be on a livable fixed income (e.g. a municipal pension) and that income could be very lightly taxed today relative to a viable consumption tax.

Government pensions seem like the easy one. The state would be getting the revenue from when they spend the money, so they could use it to adjust the amount of the pension ("cost of living adjustment") and it would be revenue-neutral. But also, government pensions tend to be, shall we say, unreasonably generous, because they live in that sour spot between "the legislature doesn't have to pay for this in the current y…

Are state government pensions worse? Folks live and work for a state that includes a pension, i.e. Illinois, then retire and move out of the state, no longer contributing to that state's economy, just drawing on it. Thoughts?
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