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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?

#861

Post by em500 »

llsf wrote: post #804
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…

What if I build and manage a dark factory ( https://en.wikipedia.org/wiki/Lights_out_(manufacturing) ) and it produces gizmos. Since all my competitors are also running dark factories, we compete essentially on source materials + energy (assuming we have similar design/quality). Margin would be eventually razor thin. The dark factory does not make much capital gains, even as it produces 1,000 gizmo per second. The ca…

> Sure the 4,995 unemployed might be able to afford the gizmo, but the state does not receive the same taxes. So what happens to those 4,995 unemployed people ? who is paying for their health benefits and social security (retirement) ?

So are we're simultaneously facing a big unemployment crisis, and a big shortage of health care providers and retirement care takers?

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

#862

Post by Tangurena2 »

n1b0m wrote: post #712
jimbokun wrote: post #670

Earlier quoted context omitted.

Can we have a grown up discussion that uses numbers instead of hyperbole? Certainly you can argue income inequality is too high and capital holders and high earners need to pay much more. But you cannot seriously argue that capital owners "avoid contributing to the financing of our states and social systems". They pay a lot in capital gains and income taxes, even if they don't contribute as much as they should.

Ultra-wealthy individuals legally minimise their tax liability by: Receiving a relatively low official salary (Bezos's Amazon salary was $81,840 for many years). Not receiving dividends, so the wealth remains in stock that is not taxed annually. Borrowing money against their stock holdings to fund their lifestyle. Loans are not considered income and are therefore not taxable, and the interest on the loans can sometim…

> Borrowing money against their stock holdings to fund their lifestyle. Loans are not considered income and are therefore not taxable, and the interest on the loans can sometimes be used as a deduction.

A loan should definitely be a taxable event and capital gains taxes should apply to rebase the value of the stock to the market value at the time the loan is taken out. Currently, very wealthy people use the loan dodge to avoid selling stocks and since the loan isn't paid off until death (usually), estate taxes wave their hands and any gains in the stock price go away, so that the next nepo generation gets to repeat the same dodge.

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

#863

Post by smitty1e »

nospice wrote: post #46
smitty1e wrote: post #13

Serious question: when will the AI generate the perfect taxation system/budget combination?

Even if you assume a sci-fi scenario of an omniscient, infallible AI, there's probably no single utility function that would allow it to decide optimal resource allocation. In fact, we avoid a lot of difficult moral dilemmas because we accept the systems are crappy and just a necessary evil. The closest you claim to be to perfection, the more you have to acknowledge that some moral questions are just impossible to se…

I cannot refute your response, sir.

OTOH, I don't more than partially agree.

We can stipulate that some kind of mathematical perfection is unattainable, sure. The discussion might then move to the feedback loops that detect the state of the State and offer stabilizing input.

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

#864

Post by ch4s3 »

thethimble wrote: post #760
n1b0m wrote: post #712

Earlier quoted context omitted.

Ultra-wealthy individuals legally minimise their tax liability by: Receiving a relatively low official salary (Bezos's Amazon salary was $81,840 for many years). Not receiving dividends, so the wealth remains in stock that is not taxed annually. Borrowing money against their stock holdings to fund their lifestyle. Loans are not considered income and are therefore not taxable, and the interest on the loans can sometim…

Borrowing against illiquid assets should be considered a taxable event. Seems like this would entirely fix the loophole.

So every small business loan should be a taxable event?

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

#865

Post by timeon »

SirMaster wrote: post #798
nightshift1 wrote: post #777

Earlier quoted context omitted.

People would be more likely to shop in their local stores, buy local products, and sustain the local economy.

OK but how realistic is that? Not everyone lives in a city nearby local stores. There is such a wide variety of products that people go to Amazon for. I know I do. So many things are niche I can't see how any local stores could exist to stock things like that in even a 1 hour range from a majority of the population. How many people are going to drive hours to go to a special boutique that has this random thing they w…

> OK but how realistic is that? Not everyone lives in a city nearby local stores.

Are you serious? I live in country where we are not using Amazon.

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

#866

Post by UltraSane »

haroldp wrote: post #846
rtkwe wrote: post #843

Earlier quoted context omitted.

We've launched dozens of shuttles below the minimum temp threshold before there's no reason to delay this launch... Also that's a singular industry, if the current crop of AI companies deliver what their hype and valuation demands it's a shock across the whole economy not isolated.

> Also that's a singular industry 200 years ago, 95% of the workers in my country worked in subsistence farming. Today, only 2% are farmers. The whole spectrum of labor has turned upside down and upside down again, in that time. It has certainly not been a singular industry.

There is no guarantee that this pattern will continue and that capitalism will always make enough good jobs for everyone who loses jobs to automation.

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

#867

Post by Tangurena2 »

ceejayoz wrote: post #741
jimbokun wrote: post #670

Earlier quoted context omitted.

Can we have a grown up discussion that uses numbers instead of hyperbole? Certainly you can argue income inequality is too high and capital holders and high earners need to pay much more. But you cannot seriously argue that capital owners "avoid contributing to the financing of our states and social systems". They pay a lot in capital gains and income taxes, even if they don't contribute as much as they should.

> But you cannot seriously argue that capital owners "avoid contributing to the financing of our states and social systems". Sure we can. Peter Thiel managed to put $5 billion in his Roth IRA. https://www.propublica.org/article/billionaires-tax-avoidanc... "Using stock deals unavailable to most people, Thiel has taken a retirement account worth less than $2,000 in 1999 and spun it into a $5 billion windfall... What’s…

When Romney was running for President, much was made about his $100M holdings in his IRA accounts. At that time, I was working for a company who sold software to report pension (and pension-like) benefits. So we all had to become pretty familiar with ERISA and EFAST and the retirement laws every time they changed. We even had more than one attorney and several CPAs working on our staff. When the attorney tried explaining how Romney moved $100M from Bain into his IRA accounts, we all saying things that were like "that can't be legal".

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

#868

Post by esalman »

SunshineTheCat wrote: post #680
doener wrote: 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 top 1% of earners in the US pay 40% of all income taxes. https://usafacts.org/articles/who-pays-the-most-income-tax/

Top 1% have more income (income inequality is a thing). Taking away 40% income would hit the bottom 99% much harder than it would affect the life of top 1%. 50% of renters spend >30% on housing, 25% spend >50%.

40% figure is also based on individual income taxes. It drops significantly if you consider other sources (payroll etc).

Top 1% also receive preferential tax treatment and benefits disproportionately from policy changes.

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

#869

Post by strangattractor »

doener wrote: 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.

Interesting discussion concerning this on Prof G at around 35 minutes.

https://www.youtube.com/watch?v=EklEzXBQP9U&t=1353s

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

#870

Post by Terr_ »

dgb23 wrote: post #228
Terr_ wrote: post #132

Earlier quoted context omitted.

Taxing wealth is much harder on a practical and algorithmic level than taxing income. But either way, taxing the tool is micromanaging the problem, and some powerful people cynically promote that because they can aim the details away from themselves.

Switzerland taxes wealth instead of capital gains (except for professional investors). In some ways taxing wealth is quite simple, because wealth is already meticulously recorded via contracts and owners go out of their way to estimate the magnitude of their wealth for example to borrow money or for other financial and economic obligations. Another approach would be to tax capital gains at the same rate as income and…

> In some ways taxing wealth is quite simple

But there are enough other ways where it's really hard and unsolved. Imagine someone bought an $X irreplaceable ancient urn to hold the ashes of their parents.

How do you calculate the $Y "wealth" inside that non-fungible urn on their mantelpiece today? How can one determine which "I would buy that for X" statements are falsely low or falsely high?

> owners go out of their way to estimate the magnitude of their wealth for example to borrow money

I have no inherent problem linking one voluntary claim of wealth to another conclusion of wealth... But what happens when someone wealthy who doesn't actually need any loans applies for them while presenting themselves as a pauper?

Or cases where someone seeks a loan and their rationale is "I may have negative net worth but you'll be made whole because you're first in line", as opposed to "I have high net worth"?

> I have a hard time to find a good faith reason for capital gains to be taxed less than labor.

Consider a small company of AcmeCo with 1-10 workers all dedicated to the art of Acme'ing, each taking tiny wages (but accepting shares) because they believe in the mission and want to launch the company.

On a technical level, anything they (might) get would be capital gains, but clearly it's not the same as passive rents with no labor behind it. It's closer to deferred wages.

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