If I were a hedge fund shorting AI, I would nod and promote the message of this article.
If AI replaces workers, should it also pay taxes?
581–590 of 1001 posts
Re: If AI replaces workers, should it also pay taxes?
#582Earlier quoted context omitted.
No, that's been a common proposal from economists pretty much since people started examining how economies work. Some places do have a capital gains tax of zero. Switzerland is one of them, and Switzerland is economically more successful than the rest of Europe. Tax is one of those issues where there are actually correct and incorrect answers, thanks to many hundreds of years of active experimentation and relatively…
The Switzerland model is unique in several ways, both in its history, which cannot be replicated, and in embracing of...questionable financial services. It's unclear that the model can be replicated generally, let alone whether it should. Importantly, there may not be sufficient demand for banking services like the Swiss provide. Your three step plan says nothing about how much should be taxed at the personal vs corp…
The idea Switzerland's economy is dodgy or dependent on banking is an urban legend. Only 10% of Swiss GDP comes from finance at all and that includes everything, including insurance and pensions. Private banking is only a fraction of that, and private banking with anonymous accounts - which is what people tend to mean by this - was a tiny fraction of that again.
Meanwhile, financial privacy isn't inherently questionable. The USA did a big push in the 1970s to strip privacy from the financial system which until that point had been the default. That was the birth of the concept of money laundering, created as part of the war on drugs. The approach failed as drug cartels found ways to launder money cheaply enough that it wasn't a big friction for them (normal estimate, it adds ~10% to their costs). Not everyone thought that was a great tradeoff, and the Swiss numbered accounts had been used by people trying to hide from the Nazis.
At any rate, the USA forced their concept of anti-money laundering on the world (not that most countries needed the arm twisting) and Switzerland has implemented exactly the same policies as everywhere else for decades. It has no special rules with respect to banking for a long time now.
> Your three step plan says nothing about how much should be taxed at the personal vs corporate income level
It's a set of principles for answering those questions, not the full set of answers.
It's been years since I looked at this but IIRC the general agreement is that you shouldn't bother with corporate/business taxes, because they're both an indirect/inefficient way to collect tax (all taxes are paid by people in the end), and easily avoided.
It was for this reason that the designers of the EU's taxation system originally configured corporate taxation to be collected wherever the nameplate was (i.e. an arbitrary location chosen by the company). The assumption was that with time individual countries would compete the corporate tax rate to zero, fixing the underlying inefficiencies. Of course what's actually happened is some of the countries try to gang up on the others to try and force them to stop lowering taxes. It's not a stable outcome, politically.
In practice business taxes are popular because politicians view them as a way to tax citizens of foreign countries. That has bad effects too but schools either don't teach economics or don't teach it properly in most places, so there are lots of weird hacks like this where something that creates more harm than the alternative gets preferred because people can't resolve the harm to the root cause.
Re: If AI replaces workers, should it also pay taxes?
#583Earlier quoted context omitted.
Corporations don’t provide goods or services: people inside them do. Corporations are a legal structure we allow to exist because it enables jobs and taxes. Corporations don’t have to exist; they are a creation of society and thus can - and I think obviously- should be changed
Have you ever done anything together with a group of other people? That is a company. That's why they are called companies. They are a group of people doing things. That has existed for millions of years already. First as hunting companies, then as raiding companies. It exists in other species as well. It will never go away. It has existed in every human society, no matter what political or economical ideology. The r…
If you conflate corporations with any grouping of people, then they're the same as cartels, gangs, feudal kingdoms...
Clearly we're talking about a specific modern legal entity with a specific organization that, as you say, can change.
Re: If AI replaces workers, should it also pay taxes?
#584Earlier quoted context omitted.
> where's my royalty check? I support the idea of UBI with zero conditions, but not this. You didn't get royalties before AI when someone was heavily influenced by your work/content and converted that into money. If you expected compensation, then you shouldn't have given away your work for free.
[flagged]
I'm suspicious of UBI as well. I guess I don't believe it brings about the best in human nature—nor does Capitalism in many regards.
Re: If AI replaces workers, should it also pay taxes?
#585Re: If AI replaces workers, should it also pay taxes?
#586No, not the AI. Just the owner of means of production like AI. The fact that capital owners successfully avoid contributing to the financing of our states and social systems is, in my view, one of the fundamental problems of our time.
of all* time.
Re: If AI replaces workers, should it also pay taxes?
#587Earlier quoted context omitted.
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.
You live in a house. Secondary residences however are not tax deductible?
Re: If AI replaces workers, should it also pay taxes?
#588Earlier quoted context omitted.
> One can’t spend any of the money until it becomes personal assets. The oldest trick in the book is to use unrealized gains as collateral for loans - we even have banks specializing in this. Oh, and the US has a law that erases the tax bill for dead people - you'd be stupid not to use this trick.
Would you also be open to paying taxes in your 401k yearly based on unrealized gains?
Absolutely, as long as billionaires, hedge funds, and vcs are also paying a progressive tax rate on their shares and holdings.
Re: If AI replaces workers, should it also pay taxes?
#589Earlier quoted context omitted.
> I think I'd favor a "personal allowance" model similar to income tax, where you get the first X units of energy tax free and then have to pay VAT, carbon taxes etc. on the rest of it. I can see why this is tempting, but I think there's a better way to legislate with this, especially with that poster child. I'm a landlord of a flat. I used to live in it before I left the UK. The EPC rating is D, so despite the doubl…
I remember there was a pressure group "insulate britain". Their aggressive tactics got them banned and arrested, and the idea was never heard from again. I sometimes wonder if that wasn't the intended outcome, a low-temperature conspiracy theory.
I'd forgotten about them, given the timing.
Thinking about who might benefit from it being a conspiracy, the only finger I can point at would be Russia? (Well, unless it's a long-term generational anger at the British Empire, which I have discovered is more of a thing than most Brits realise).
Re: If AI replaces workers, should it also pay taxes?
#590Earlier quoted context omitted.
> One can’t spend any of the money until it becomes personal assets. The oldest trick in the book is to use unrealized gains as collateral for loans - we even have banks specializing in this. Oh, and the US has a law that erases the tax bill for dead people - you'd be stupid not to use this trick.
>the US has a law that erases the tax bill for dead people That is true, but there is a theory, applied very weakly, that supports this. The idea is that a decedent's estate is subject to a wealth tax on its fair market value, therefore to also subject the unrealized gains within the estate to income tax would be double taxation, which is to be avoided. The flaw is that the exemption from the estate tax is relatively…
It does not make sense.
One inherits free money - and pay inheritance tax of it. In order for capital to be free, capital gains tax needs to be paid.
And the general idea to protect against "double taxation" is meaningless. All money are constantly being taxed again and again.
Regardless. Inequality in itself is really bad, and Americans do feel the consequences.