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If AI replaces workers, should it also pay taxes?

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Re: If AI replaces workers, should it also pay taxes?

#321

Post by Treegarden »

dns_snek wrote: post #221

It feels really alien to discuss this in terms of "taxing AI", like an economic abstraction completely breaking down. Ultimately when you take automation to its logical conclusion we have people with needs and we have machines and automation capable of meeting those needs with minimal human labor. No matter how you try to resolve this economically, it should hold that if something can be produced with minimal human l…

I see a natural equilibrium with a tension: automation (also through AI) causes unit economics to drop and results in cheaper prices. At the same time, salaries for contributors grow because their impact is so high. So you end up with a new equilibrium of much cheaper prices and much higher salaries. What, however, about the people who can’t contribute? IMO the most natural and fair approach is to support (through whatever means) people’s “education”, allowing them to upgrade their skills so that they can contribute. IMO this leads to a new tension: not rich vs poor, or useful vs useless, but people who can up-level their skills vs those who don’t. And I think, at its extreme, it boils down to this: how much plasticity does your brain have? Because every other constraint, society can adapt or accommodate for.

Re: If AI replaces workers, should it also pay taxes?

#322

Post by general1465 »

If it won't then it is effectively short circuiting whole capitalist society as we know it

If people are not working, then they have no income - Less taxes for state

If they have no income, they can't buy stuff or services - Less taxes for state

If companies can't sell stuff and services, they are going bankrupt - Less taxes for state

If state has no income from taxes, state is going bankrupt.

Consumers, Companies and Governments all will go bust if state are not going to massively and aggressively tax AI and automation. Then pay UBI to consumers so we can at least pretend that capitalism is still a thing.

Re: If AI replaces workers, should it also pay taxes?

#323

Post by smallmancontrov »

bruce511 wrote: post #274
harperlee wrote: post #187

Earlier quoted context omitted.

100% agree! I find quite concerning that this point is not immediate in any conversation about AI or robots impacting the number of jobs, and the subsequent conversation about innovating new taxes. AI and robots are capital as any other automation on a factory, and capital gains should be taxed appropriately. This is not a new thing completely separate from the untouchable status quo wrt existing taxes. If it tickles…

I'm not sure I'm following your thought on capital gains tax. Capital Gain tax occurs when you sell an asset for more than you paid for it. AI (software) is not an asset, and I'm not sure how you'd sell it. Computers and robots are assets (although they typically depreciate not appreciate.) Either way capital gains tax is applied to the asset not the productivity of the asset . The productivity in turn is taxed as pa…

If your brokerage account is large enough that most of your change-in-net-worth happens in unrealized capital gains, your tax rate is 0%. That's pathological at the best of times and in a "capital wins" scenario it's positively thermonuclear.

Re: If AI replaces workers, should it also pay taxes?

#325

Post by nextaccountic »

nairboon wrote: post #215
nextaccountic wrote: post #156

Earlier quoted context omitted.

> Maybe taxing a kWh of the AI data center energy consumption should be a thing? That sounds excellent. Also water usage. Really, AI has externalities and it should pay for it.

That would be a highly bureaucratic solution with significant overheads. Would everyone pay extra tax per kWh or just AI computers? Tax it on the producer or consumer side? How would you verify that a particular data center is "bad computation" and needs a different tax rate on its energy usage. Should an AI data center from pharmaceuticals or biotech startup be taxed extra per kWh, even if the AI is purely used for…

Just big AI datacenters. If this encourages people to run local AI, all the better.

> Should an AI data center from pharmaceuticals or biotech startup be taxed extra per kWh, even if the AI is purely used for medical research?

That's not a gotcha.. those are all policy choices. My personal preference is, yes, of course - medical research today is taxed just fine. If there's lobbying to specifically grant tax benefits to medical research, I can see an exception being carved.

Re: If AI replaces workers, should it also pay taxes?

#326

Post by ceejayoz »

gjsman-1000 wrote: post #270
ceejayoz wrote: post #252

Earlier quoted context omitted.

> The current interest on our national debt is greater than our military spending. For quite some time, my mortgage interest was larger than my principal. That didn’t make it fiscally irresponsible.

Economists currently cannot find a solution, even with computer assistance, to our economy. https://www.marketplace.org/story/2025/07/14/how-our-debt-cr...

That’s pretty standard for economists.

Re: If AI replaces workers, should it also pay taxes?

#327

Post by JoeAltmaier »

smallmancontrov wrote: post #323
bruce511 wrote: post #274

Earlier quoted context omitted.

I'm not sure I'm following your thought on capital gains tax. Capital Gain tax occurs when you sell an asset for more than you paid for it. AI (software) is not an asset, and I'm not sure how you'd sell it. Computers and robots are assets (although they typically depreciate not appreciate.) Either way capital gains tax is applied to the asset not the productivity of the asset . The productivity in turn is taxed as pa…

If your brokerage account is large enough that most of your change-in-net-worth happens in unrealized capital gains, your tax rate is 0%. That's pathological at the best of times and in a "capital wins" scenario it's positively thermonuclear.

Folks like to hate on capital gains tax. I think it's perceived as a rich-person deal. But homeowners, do they get taxed each year on the increase in value of their house? Almost the same thing, but not hated on the same way.

Re: If AI replaces workers, should it also pay taxes?

#328

Post by beepbooptheory »

wodenokoto wrote: post #212
paxiongmap wrote: post #199

Earlier quoted context omitted.

In a capitalist system, capital makes the rules for everyone. This is why capital earns more than labour. System working as intended.

Sorta depends on where one draws the line, but the line you are drawing, suggest there should be no government, so "system not working as intended"

How little imagination we have anymore! Its like you discover ice cream but for some reason only chocolate ice cream. Someone is like "chocolate is no good" and all you know to think is: "Oh so you guys just dont want ice cream at all?!"

Re: If AI replaces workers, should it also pay taxes?

#330

Post by snovv_crash »

TheOtherHobbes wrote: post #238
nairboon wrote: post #214

Earlier quoted context omitted.

> Taxing wealth is much harder on a practical and algorithmic level than taxing income. I find this argument somewhat unconvincing. Where is most of the wealth? In hard assets, such as real estate and financial assets, such as stocks and bonds. The former are very difficult to hide, for obvious reasons. As for the latter, the ownership of every single share is recorded in large databases (e.g. DTCC, Clearstream and E…

Financial assets are extremely easy to hide. Set up an international chain of shell companies, foundations, and trusts, install a fake beneficial owner or trustee or two at various points, carve out deductibles for IP and "services", and the ownership becomes completely opaque. And that's just the legal version. I know someone who used to work as a business lawyer. She spent years trying to track down the true owners…

A flat tax on wealth would be extremely easy to enforce. Basically if the bill for an asset doesn't get paid it goes to the government, and the bill is trivial to calculate because it doesn't need the rest of the entity.
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