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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?

#721
post #432
post #394

Earlier quoted context omitted.

I could not agree more. Another fundamental problem is that the means of production are concentrated into the hands of a few.

Are they though? At least for AI/software the last 30 years were fantastic to have universal access to means of production (compilers, tools, operating systems, models, you name it). I am more worried about the capability of people to use the free means of production (more precisely improve education) rather than the concentration. Edit: and to remove any doubt, I do agree that taxation of capital is completely badly…

There are more things in this world than software. Many of them are important!

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

#722
post #184

No, 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.

The fact that people think, capital owners who actually provide employment and produce useful things and do better the better they serve the consumer even when their motives aren’t altruistic (and when they are altruistic it is even better) should be taxed more so the giant government corporation can make bureaucrats pockets fatter and waste a bunch of money doing inefficient things is more of a fundamental problem.

I was so with you the first half of that. But the notion that everything should be capitalism is just as wrong as the notion that nothing should be capitalism (or, that capitalism only leads to bad things; obviously wrong but somehow a broadly accepted truism).

Capitalism works when a market works; capitalism fails when a market fails. Healthcare is a great example, because there’s an obvious and inherent imbalance in demand vs supply. Firefighting is another great example. These also have externalities to the community as a whole that everyone gets, even when you don’t pay/need the service; so it makes sense to make everyone pay (taxes). Even if you never have a child, even if you send your kids to private school, you live in a society that could only exist because of a (formerly, relatively) high standard of public education. So everyone pays for schools.

The idea of government bureaucrats lining their pockets is also (formerly, relatively) ridiculous: who would get into US government bureaucracy to make money? They are all (formerly, relatively) doing it almost uniformly because they believe in the mission, because they would almost all make more money going private.

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

#723
post #579

Earlier quoted context omitted.

One thing to point out that is lost in these arguments of “they create value for the shareholders”. Folks that own a vast amount of stock do not pay taxes on that stock. They own the shares, and they take out loans against those shares. At some point they rollover or pay off those loans by selling some shares, but the shares have increased in value significantly in that time, or they’ve been granted new shares. When…

First, taxes still get paid when the individual dies as estate tax. Second, increased shareholder value typically means more corporate profit which is also taxed. Third, dividends are taxed. So your claim that the shareholder value never makes its way into the tax system is plainly false. This is all aside from the fact that increased shareholder value means a more abundance society regardless of the increase in taxe…

> taxes still get paid when the individual dies as estate tax

Almost no one in the US pays the estate tax. It only applies to estates over $14MM and most large estates get reorganized into trusts with estate tax avoidance as a primary motive.

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

#724

Earlier quoted context omitted.

> How about the rich say that 50% of the economy should pay their fair share? How exactly do you propose that they pay their fair share when they literally do not have the money or assets to do so? Are you proposing modern day slavery? Perhaps people selling their family? I'm curious what happens if you take this line of thought to it's actual conclusion.

The solution is obvious and simple: Tax wealth not work.

Even if you were to liquidate every billionaire in America, at a 100% tax rate above $1 billion, and were able to sell the shares at current stock prices without a collapse, you would pay for the government deficit for... 3 years. Because their combined wealth, on paper, is $7T while we're running over $2T shortfalls every year.

3 years of not taking out debt, while still needing everyone else to pay current rates. Then you're back to square one. Sans billionaires and sans any major capital investment anywhere.

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

#725
post #497

Earlier quoted context omitted.

Yes, I pay property taxes every year that are based on the current assessed values of my home and car. Only special classes of assets are subject to property taxes. "Wealth tax" proposals are a generalization of the idea of real property taxes so as to stop penalizing specific asset classes like homes.

If you dig into how property tax is allocated, your tax will only go up if your house appreciates more than similar properties - which usually has something like redevelopment or other externality. It is normally not a fixed percentage of your value, but simply "here's what the county/city paid this/next year, divided amongst the properties proportionate to the value." Some, like sewer, etc, are per-property, but mos…

I'm sure it depends on the jurisdiction, but all the property taxes I have ever paid (which, to be fair, has been in one county) have been a fixed percentage of the value of the property.

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

#726

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.

This is possible in theory.

I think that if we look at inflation-adjusted productivity, and inflation-adjusted average income, then that would indeed prove increasing inequality, right?

I believe the chart in this link is adjusted by inflation. Showing overall the same trend:

https://www.epi.org/productivity-pay-gap/

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

#727
post #570

Earlier quoted context omitted.

If AGI is actually attainable, then, sure, planned economies will be more performant than market economies, especially for high value industrial captal equipment. No need for Gosplan to decide on your candy bars and craft breweries.

> If AGI is actually attainable, then, sure, planned economies will be more performant than market economies What is the logic?

A market economy is a distributed compute engine. The main reason why planned economies do worse historically is because the amount of compute needed to actually account for everything centrally is so immense (and thus costly), the implementers necessarily have to adopt some kind of simplified model, and then you get divergence between what the plan says and what's actually happening.

It's not a given that this will remain true forever, although I don't think it's tied to AGI. One could argue that AGI push is the trigger for a massive increase in compute capacity and corresponding decrease in price that might make this kind of thing viable, but that's just wishful thinking, not a fact.

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

#728
No, "AI" is software, and software is a tool, and tools aren't people that should pay taxes.

You wouldn't charge your CNC Machine taxes for the productive labor it produces that could have otherwise been done by a dozen blacksmiths.

By all means have corporate and sales taxes pertaining to the owner of said tools though. Even as a right-leaning individual, it's become pretty clear to me that corporations pay too low in taxes compared to the broad 'middle class'. Corporate tax cuts don't help the common man. An extra few hundred in their pockets each month certainly would though.

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

#729

Earlier quoted context omitted.

If you dig into how property tax is allocated, your tax will only go up if your house appreciates more than similar properties - which usually has something like redevelopment or other externality. It is normally not a fixed percentage of your value, but simply "here's what the county/city paid this/next year, divided amongst the properties proportionate to the value." Some, like sewer, etc, are per-property, but mos…

Right. Property taxes are a combination of fee-for-service for infrastructure, and a "congestion tax" for occupying land that nobody else can use. It's explicitly not a wealth tax because you owe it even if you have 0% equity.

You owe tax based on your percentage of ownership. The taxing authority doesn't care about equity because you own 100% of your house (albeit with a lien) even if your outstanding mortgage obligations exceed the value of the house. Generally, when you close on a house in the US, you walk away with the title to the house and a mortgage equal to a large percentage of the house's value. The bank only owes property taxes if they foreclose on the property and take the title from you.

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

#730
post #671
post #346

Earlier quoted context omitted.

You're completely omitting externalised cost, though. As it stands, all this production requires gargantuan amounts of energy that have to come from somewhere, and cause pollution and waste that must be accounted for. As long as these factors aren't solved—if they can be solved in the first place—either the prices for consumers or the manufacturing cost must reflect this, I don't see the increased degree automation a…

That has nothing to do with this, those are things that should still be solved at a much higher level of abstraction. Tax the energy, pollution, waste - those have problems regardless of what caused them.

The point I am making is that the reason artefacts of highly automated production (even with minimal human labor required) will never become accessible for very low human labor, because all that automation has its own cost. We can externalise that as long as possible and defer the bill to somewhere or someone else, but it will have to be paid eventually.

> […] those are things that should still be solved at a much higher level of abstraction […]

I don't think that makes much sense. If a data center consumes all available electricity in a given municipality, it may provide AI services at a very low cost, but thereby makes the region uninhabitable. There is no way to "solve" this at a higher abstraction level. Or alternatively, consider a factory producing consumer goods, which emits toxic fumes; we can limit the amount of fumes the vicinity of the factory is exposed to by implementing very expensive filters—thus increasing the final price of the goods—or externalise all the negative effects—such as health risks in the population, ecological demise, and subsequently lower property values—to society, achieving a lower final price.

Currently, we often pick the latter option, because it usually has the better profit margin. I agree that it's a systemic issue that must be addressed holistically, but the actual solutions have to be implemented at all levels of the production chain. And this means the cost attached will have to be included in the price of all goods.

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