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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?

#631

Post by solumunus »

komali2 wrote: post #355
solumunus wrote: post #287

Earlier quoted context omitted.

We’ll see. I don’t understand how anyone can view this as an inevitably in the short/medium term, yet that’s how a lot of people are talking. There’s really nothing to suggest this change is imminent.

Imminent or not, what jobs will remain? Fixing the robots? Technology strives to reduce cost, labor is typically the largest cost, so is it not inevitable that labor will be made mostly redundant?

No it’s not. It’s not inevitable that we get super intelligence, or even regular intelligence AGI. Even if we did, the cost of building, running and maintaining a robot to do manual jobs - I would argue this will never be cheaper than paying humans to do the same thing.

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

#632

Post by daedrdev »

njarboe wrote: post #543

Many problems with the tax code and all of its complications is due to the fact that people are taxed on revenue and businesses are taxed on profit (revenue -costs). It would be good to remove this mismatch. I would prefer eliminating the income tax (land tax anyone?) but you could take business on revenue (a VAT is sort of like this).

Revenue has almost no relation to the ability to pay. There are plenty of businesses making 1 or 2% profit, often because they have high pass through, like distributors of all forms, including supermarkets and stores.

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

#633

Post by cheema33 »

iso1631 wrote: post #312
gjsman-1000 wrote: post #270

Earlier quoted context omitted.

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...

It's crazy how in 1992 the US federal deficit was 4% of GDP During Clintons term this turned around to being a 2.3% surplus in 2000. Just 25 years ago the US was spending less than it was taking in tax. The Bush came in and that surplus became a 3.3% deficit by 2003, and then the GFC crashed it to 9.8%. While Obama was in, it crawled back from 9.8% deficit to 3.1% by 2016 - same value as before the GFC Since then it'…

Are you telling us that the party of golden ballrooms... err.. fiscal responsibility is not actually being fiscally responsible?

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

#635

Post by kiba »

ToucanLoucan wrote: post #349
zozbot234 wrote: post #334

Earlier quoted context omitted.

This is a bad deal. Capital makes the marginal worker more productive, not less. You can tax the worker and she will still be better off than if you had taxed the capital, due to greater productivity. (This argument also applies to AI, of course. Since AI doesn't just instantly wipe out all jobs, there will be many workers that will benefit from it and will thus be quite able to fund their governments and social syst…

> Capital makes the marginal worker more productive, not less. You can tax the worker and she will still be better off than if you had taxed the capital, due to greater productivity. Point one: higher productivity is not necessarily our goal. I could think of numerous industries that would make the world better if they did less work. Point two: There's a moral absurdity in taxing the wages earned by labor more heavil…

It's both. You don't want to tax capital and income. VAT and sale tax are a bad idea too, especially since they're regressive.

So, what do you tax? You tax land and land-like things, non-reproducible privileges(like patents and copyright), pollution and other negative externality.

Now, there's an argument to be made that we couldn't possibly be able to fund governments on the back of these taxes. Fair enough, but it should mean we minimize those taxes until the economy grows enough to fund government services.

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

#637

Post by alexashka »

kortilla wrote: post #530
jarpschope wrote: post #357

Earlier quoted context omitted.

If productivity is increasing but not average salary, then by definition the additional wealth is being taken by the owners of capital.

No it’s not. If the increased productivity is realized by multiple industries, then they all compete on price and the price of their goods comes down. That means the consumers of the product capture the gains in productivity. Farmers using machinery instead of labor has meant cheaper food for everyone, not rich farmers.

Right, because governments do anti-trust and ensure fair competition. We all agree.

When your argument boils down to discussing fantasies in a fantasy world, you have a bright future as an economist indeed.

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

#639

Post by triceratops »

mike_hearn wrote: post #559
triceratops wrote: post #550

Earlier quoted context omitted.

> 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 Switzerland is a bad example because they tax capital more directly. In the form of a wealth tax. https://en.wikipedia.org/wiki/Taxation_in_Switzerland#Wealth... GP said setting taxes on capital to zero was a bad idea. Switzerland has only set capital gains taxes…

I live in Switzerland. It's an excellent example of a place without a capital gains tax, because it doesn't have one. I didn't say it doesn't have other taxes! The type of tax matters a lot. The reason capital gains taxes are bad is that they discourage investment, but investment is how you create wealth. "Creating wealth" is ultimately a synonym for creating material progress. Voters like progress, and so this is a…

Let's summarize:

airstrike: zero taxes on capital are a bad idea

mike_hearn: Switzerland has no capital gains taxes and it's great.

triceratops: Ok but it still taxes capital.

mike_hearn: I live in Switzerland. No capital gains taxes are great and everywhere other than Switzerland has a lower tax rate for them than income because we want more capital gains. Also wealth taxes can cause startup founders to be taxed heavily.

There's a bit of a disconnect here. You're arguing against multiple strawmen IMO.

Outside Switzerland the current situation is: regular people pay high income taxes while they work, then somewhat lower capital gains taxes in retirement. Ultrawealthy people pay far less of both because they have ways to avoid them (keep employment income low, borrow against wealth instead of selling it).

In Switzerland, since the wealth is straight up taxed, even if at a lower rate (I ran the Swiss wealth tax numbers myself a while ago and you're right it really is a very small amount. I pay way more in capital gains taxes) there are fewer games. Everyone pays taxes on what they make or own.

The startup wealth tax problem has another solution: allow payment in non-voting startup shares, instead of liquid cash. The shares go into a sovereign wealth fund. The government either reaps a windfall eventually alongside the founder, or it misses out on tax revenue it shouldn't have collected anyway (if you look at it from the fairness point of view).

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

#640

Post by pyrolistical »

ashleyn wrote: post #366
vjk800 wrote: post #344

Tractors largely replaced human labour in farming about a hundred years ago. Should we have started taxing tractors? I really have difficulties seeing AI as anything else than yet another type of machinery. If your argument is "but it's replacing ALMOST ALL human labour" - well, the same argument was valid for tractors a hundred years ago (when almost everyone was employed in agriculture).

This argument hinges rather strongly on whether or not AI is going to create a broad, durable, and lasting unemployment effect. Tractors did not cause this phenomenon because jevons paradox kicked in and induced demand rendered the problem moot, or demand eventually exceeded what mere tractors were capable of doing for agricultural productivity. The same can probably be said for contemporary AI, but it's tough to tel…

When most of the human population were farmers should we have taxed advances in agriculture which destroyed the everybody’s job?
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