AI employees don't pay taxes(alec.is)
alec.is
AI employees don't pay taxes
https://alec.is/posts/ai-employees-dont-pay-taxes/
189 comments
> Which means there's less workers being paid, less taxes, less money to be spent on the economy, which means less money to pay workers, which means... the logical conclusion is "no economy at all".
Except that's not how the economy works.
Suppose you automate web development. Fewer people get paid for that anymore. Does it increase long-term unemployment? Not really, because it creates surplus. Now everybody else has a little extra money they didn't have to spend on web development, and they'll want to buy something with it, so you get new jobs making whatever it is they want to spend the money on instead.
The only way this actually breaks down is if people stop having anything more they want to buy. But that a) seems pretty unlikely and b) implies that we've now fully automated the production of necessities, because otherwise there would be jobs providing healthcare, growing food, building houses, etc.
Except that's not how the economy works.
Suppose you automate web development. Fewer people get paid for that anymore. Does it increase long-term unemployment? Not really, because it creates surplus. Now everybody else has a little extra money they didn't have to spend on web development, and they'll want to buy something with it, so you get new jobs making whatever it is they want to spend the money on instead.
The only way this actually breaks down is if people stop having anything more they want to buy. But that a) seems pretty unlikely and b) implies that we've now fully automated the production of necessities, because otherwise there would be jobs providing healthcare, growing food, building houses, etc.
> Now everybody else has a little extra money
The flaw is assuming that lower costs “free up” money.
Money isn’t "freed". Money is created. Banks create it when they lend against future income. If automation removes wage income, banks don’t create replacement demand: they redirect credit into assets.
That’s why you can have rising productivity, stagnant wages, booming asset prices, and weak consumption at the same time. The missing variable is where credit is created, not how efficient production is. (Think Japan in the 90s)
If you think the AI threat is real buy real assets now. (not financial IOUs in computer systems)
"How Do Banks Create Money?" https://www.youtube.com/watch?v=3N7oD5zrBnc
The flaw is assuming that lower costs “free up” money.
Money isn’t "freed". Money is created. Banks create it when they lend against future income. If automation removes wage income, banks don’t create replacement demand: they redirect credit into assets.
That’s why you can have rising productivity, stagnant wages, booming asset prices, and weak consumption at the same time. The missing variable is where credit is created, not how efficient production is. (Think Japan in the 90s)
If you think the AI threat is real buy real assets now. (not financial IOUs in computer systems)
"How Do Banks Create Money?" https://www.youtube.com/watch?v=3N7oD5zrBnc
>Now everybody else has a little extra money they didn't have to spend on web development, and they'll want to buy something with it, so you get new jobs making whatever it is they want to spend the money on instead.
Why assume a business that just boosted profits by reducing headcount would want to spend that surplus on hiring more workers elsewhere? Seems like it would mostly go towards stock buybacks and higher executive pay packages. There might be some leakage into new hiring, but I reckon the overall impact will be intensifying the funneling of money to the top and further hollowing out of the labor market.
Why assume a business that just boosted profits by reducing headcount would want to spend that surplus on hiring more workers elsewhere? Seems like it would mostly go towards stock buybacks and higher executive pay packages. There might be some leakage into new hiring, but I reckon the overall impact will be intensifying the funneling of money to the top and further hollowing out of the labor market.
But that implicitly assumes all jobs are comparable financially. Sure there’ll always be jobs to do but x number of web devs or whatever is not the same as x numbers of nursing home care workers.
Also in terms of extra money and spending, the logic also breaks a bit because we know that by age cohorts, older cohorts have more money but tend to have less consumer spending than the 25 - 40 cohort.
Also in terms of extra money and spending, the logic also breaks a bit because we know that by age cohorts, older cohorts have more money but tend to have less consumer spending than the 25 - 40 cohort.
Your implicit assumption with the web dev is that this scales. Unfortunately, that may not be the case.
It's not a matter of scale. If people don't have to spend as much on X then they end up with extra money and will spend it on Y. Jobs then shift from X to Y.
This has been happening for centuries. The large majority of people used to work in agriculture. Now we can produce food with a low single digit percentage of the population. Textiles, transportation, etc. are all much less labor intensive than they were in the days of cobblers and ox carts, yet the 20th century was not marked with a 90% unemployment rate.
It's either one of two things. Either post-scarcity is possible because machines that can collect and assemble resources into whatever anybody wants at no cost are possible, and then nobody needs to work because everything is free. Or it isn't, there are still things machines can't do, and then people have jobs doing that.
This has been happening for centuries. The large majority of people used to work in agriculture. Now we can produce food with a low single digit percentage of the population. Textiles, transportation, etc. are all much less labor intensive than they were in the days of cobblers and ox carts, yet the 20th century was not marked with a 90% unemployment rate.
It's either one of two things. Either post-scarcity is possible because machines that can collect and assemble resources into whatever anybody wants at no cost are possible, and then nobody needs to work because everything is free. Or it isn't, there are still things machines can't do, and then people have jobs doing that.
Look at any non-Western country with a massive population, how is their excess labour faring?
It's always hilarious to see lazy, innumerate people claiming that "it’s math" when in reality they just made up numbers and didn't do any calculations.
You're assuming it's even a person when the author admitted they used an LLM for writing this article.
> Apart from being all AI-written
I think nearly 100% of blog posts are run through an LLM now. The author was lazy and went with the default LLM "tone" and so the typical LLM grammar usage and turns of phrase are too readily apparent.
It's really disheartening as I read blogs to get a perspective on what another human thinks and how their thought process works. If I wanted to chat with a LLM, I can open a new tab.
I think nearly 100% of blog posts are run through an LLM now. The author was lazy and went with the default LLM "tone" and so the typical LLM grammar usage and turns of phrase are too readily apparent.
It's really disheartening as I read blogs to get a perspective on what another human thinks and how their thought process works. If I wanted to chat with a LLM, I can open a new tab.
You might be interested in this: https://news.ycombinator.com/item?id=45722069
I never use an LLM for blog posts. Seemed like you need to hear more people telling you that.
Only amateurs and scammers use LLMs for writing.
Only amateurs and scammers use LLMs for writing.
> It's all just efficiency gains and everyone currently employed stays employed? Not a single AI company wants that.
I disagree with your assertion. Efficiency, production improvements are exactly what many companies are going for. We already have a huge deficit of software that needs to be written that cannot be written with the current Human programming resources available. We have plenty of things, infrastructure and otherwise, that don’t get built because of a lack of human labor to do them. We haven’t colonized the solar system yet due to a lack of resources, etc…
It’s really pessimistic to think that all this tech is going to go to maintaining the current status quo with just much less labor.
I disagree with your assertion. Efficiency, production improvements are exactly what many companies are going for. We already have a huge deficit of software that needs to be written that cannot be written with the current Human programming resources available. We have plenty of things, infrastructure and otherwise, that don’t get built because of a lack of human labor to do them. We haven’t colonized the solar system yet due to a lack of resources, etc…
It’s really pessimistic to think that all this tech is going to go to maintaining the current status quo with just much less labor.
100% this. I run a software company and we never run out of new things to build. Our issue is velocity, we would be foolish to lay off employees, rather we must use AI to build things 50% faster if we can. What AI will do is further level the playing field in software, just like tractors allowed farms to expand in size.
> It's all just efficiency gains and everyone currently employed stays employed? Not a single AI company wants that. Not a single tech company wants that. Not only do they want layoffs, they're already happening. So that's not going to work out.
Every single AI company and tech company would be 100% ok with just efficiency gains. They want to make money and proving efficiency is more then enough for that.
Every single AI company and tech company would be 100% ok with just efficiency gains. They want to make money and proving efficiency is more then enough for that.
> Which means there's less workers being paid, less taxes, less money to be spent on the economy, which means less money to pay workers, which means... the logical conclusion is "no economy at all". Taxes are the last thing to worry about then.
Assuming the hype pans out and we get AGI, the end result won't be "no economy at all," it'll be a really weird one that does nothing to satisfy the common man's needs (because they will be of no economic use to the owners of the technology).
All the world's resources will be harness to satisfy the whims of a very few trillionaires, and there will be no place for you (except perhaps as a cultish sycophant, if you're lucky)
Assuming the hype pans out and we get AGI, the end result won't be "no economy at all," it'll be a really weird one that does nothing to satisfy the common man's needs (because they will be of no economic use to the owners of the technology).
All the world's resources will be harness to satisfy the whims of a very few trillionaires, and there will be no place for you (except perhaps as a cultish sycophant, if you're lucky)
> the logical conclusion is "no economy at all"
Marx called it 150 years ago. Its happening precisely how it said it would.
Marx called it 150 years ago. Its happening precisely how it said it would.
Exactly. A lot of people think he only wrote about Communism. And he also wrote how capitalism has failed since John Smith first wrote of it.
Is pure communism the right answer? Of course not. But mixing elements would avoid the worst of capitalism and communism.
Is pure communism the right answer? Of course not. But mixing elements would avoid the worst of capitalism and communism.
Billionaires (that REALIZE gains on their investments via loans based on the investments' current value and not the original value)and AI Companies are about representation without taxation, while those that are taxed get their voice drowned out by those same actors.
arm32(4)
Payroll taxes are inefficient as they discourage work and increase its cost for employers, leading to lower hiring. If payroll taxes vanishes because of AI, it doesn't mean that we should stop using it to increase productivity, but rather reorient taxes.
For instance, land value tax or consumption taxes are often seen as more efficient and fair, depending on their implementation. They also are AI-proof.
For instance, land value tax or consumption taxes are often seen as more efficient and fair, depending on their implementation. They also are AI-proof.
The problem with consumption taxes, as we have seen time and time again, is they disproportionately affect those with lower incomes.
You can alleviate this by taxing less goods mainly consumed by lower income workers, and handling out social welfare.
Do people with lower incomes have the entitlement to all benefits of the state without paying a fair share of their own?
If anything, there’s plenty of literature showing that social programs and tax exemptions on the poor make underpaying them possible to begin with. Walmart couldn’t pay $12/hr. if tax exemptions and SNAP and other aid didn’t fill the gap.
If anything, there’s plenty of literature showing that social programs and tax exemptions on the poor make underpaying them possible to begin with. Walmart couldn’t pay $12/hr. if tax exemptions and SNAP and other aid didn’t fill the gap.
We don't have go go to the extremes of employers that pay what is effectively poverty wages relative to cost of living.
The household that brings home $80K/yr would always spend a larger percentage of their income on taxable consumption, than an executive that takes home multiple million per year. Progressive income tax brackets are a better tool for making sure those who are able to pay a larger share of the common good, do so.
Unfortunately, we still have not come up with a realistic way to deal with the hoarding of wealth - both by individuals, as well as corporations like Apple with massive warchests. Even some more broadly accepted ideas like a LVT have some issues if the future really does trend towards "AI" displacing people from their jobs.
One way or another, the reality is that the tools we have right now have persisted because they do their job well when politicians act in good faith and don't implement poor fiscal policy emphasizing short-term gains that result in long-term pain. But, they're still fundamentally flawed, and something is going to have to change if we do see dramatic changes to society in the coming decade due to developing technologies.
The household that brings home $80K/yr would always spend a larger percentage of their income on taxable consumption, than an executive that takes home multiple million per year. Progressive income tax brackets are a better tool for making sure those who are able to pay a larger share of the common good, do so.
Unfortunately, we still have not come up with a realistic way to deal with the hoarding of wealth - both by individuals, as well as corporations like Apple with massive warchests. Even some more broadly accepted ideas like a LVT have some issues if the future really does trend towards "AI" displacing people from their jobs.
One way or another, the reality is that the tools we have right now have persisted because they do their job well when politicians act in good faith and don't implement poor fiscal policy emphasizing short-term gains that result in long-term pain. But, they're still fundamentally flawed, and something is going to have to change if we do see dramatic changes to society in the coming decade due to developing technologies.
> The household that brings home $80K/yr would always spend a larger percentage of their income on taxable consumption, than an executive that takes home multiple million per year. Progressive income tax brackets are a better tool for making sure those who are able to pay a larger share of the common good, do so.
"Progressive income tax brackets" don't actually do this. The people with so much money they can't spend it all use various tax shelters as it is. They typically manage to not even pay tax on the amounts they do spend, because they borrow money and spend it instead of recognizing it as income first. So they would be paying more under a flat consumption tax than they do under the status quo. The "progressive income tax system" doesn't actually work the way it's claimed to.
On top of that, the problem is essentially fake. People absolutely can and do spend millions of dollars a year. Cardiologists making seven figures buy huge houses with multi-car garages full of exotic makes etc. It's spending billions of dollars a year that nobody is really going to do, but that's such a tiny percentage of people that it's ridiculous to design a tax system being imposed on everybody else on the basis of that, and those are the exact people who aren't paying the high rates under the existing system anyway.
Here's a proposal: Have a flat consumption tax, and then have an income tax where the rate is 0% up to the 99.9th percentile income and only the top 0.1% even have to file a tax return. The latter is going to be avoided in the same ways it is now, but at least then you can't say the billionaires don't have a higher nominal rate, right?
"Progressive income tax brackets" don't actually do this. The people with so much money they can't spend it all use various tax shelters as it is. They typically manage to not even pay tax on the amounts they do spend, because they borrow money and spend it instead of recognizing it as income first. So they would be paying more under a flat consumption tax than they do under the status quo. The "progressive income tax system" doesn't actually work the way it's claimed to.
On top of that, the problem is essentially fake. People absolutely can and do spend millions of dollars a year. Cardiologists making seven figures buy huge houses with multi-car garages full of exotic makes etc. It's spending billions of dollars a year that nobody is really going to do, but that's such a tiny percentage of people that it's ridiculous to design a tax system being imposed on everybody else on the basis of that, and those are the exact people who aren't paying the high rates under the existing system anyway.
Here's a proposal: Have a flat consumption tax, and then have an income tax where the rate is 0% up to the 99.9th percentile income and only the top 0.1% even have to file a tax return. The latter is going to be avoided in the same ways it is now, but at least then you can't say the billionaires don't have a higher nominal rate, right?
The problem with a consumption tax is not the steady state, but the transition from the current state.
How do you take a retiree couple whose main income-earning days are far behind them, and ask them to pay 25% or more on their consumption?
Not an impossible problem, but it’s THE problem.
How do you take a retiree couple whose main income-earning days are far behind them, and ask them to pay 25% or more on their consumption?
Not an impossible problem, but it’s THE problem.
Is it though? Both social security and 401k withdrawals are taxed under the existing income tax, so they'd just be paying it as consumption tax instead.
Also, aren't people with an enormous amount of stored wealth "the rich"?
Also, aren't people with an enormous amount of stored wealth "the rich"?
You don’t have to have an enormous amount of stored wealth to be on a livable fixed income (e.g. a municipal pension) and that income could be very lightly taxed today relative to a viable consumption tax.
Government pensions seem like the easy one. The state would be getting the revenue from when they spend the money, so they could use it to adjust the amount of the pension ("cost of living adjustment") and it would be revenue-neutral.
But also, government pensions tend to be, shall we say, unreasonably generous, because they live in that sour spot between "the legislature doesn't have to pay for this in the current year's budget" and "the union negotiates reasonable-seeming rules it knows it can game against public officials who are in their pocket or DGAF" e.g. pension is based on compensation in the last year before retirement and overtime is "awarded" based on seniority, so that people put in 80 hours of overtime every week in their last year. And then we're back to, aren't those the people we want to be taxing anyway?
But also, government pensions tend to be, shall we say, unreasonably generous, because they live in that sour spot between "the legislature doesn't have to pay for this in the current year's budget" and "the union negotiates reasonable-seeming rules it knows it can game against public officials who are in their pocket or DGAF" e.g. pension is based on compensation in the last year before retirement and overtime is "awarded" based on seniority, so that people put in 80 hours of overtime every week in their last year. And then we're back to, aren't those the people we want to be taxing anyway?
Are state government pensions worse? Folks live and work for a state that includes a pension, i.e. Illinois, then retire and move out of the state, no longer contributing to that state's economy, just drawing on it. Thoughts?
> If anything, there’s plenty of literature showing that social programs and tax exemptions on the poor make underpaying them possible to begin with.
That literature is playing fast & loose with terminology to justify a preexisting conclusion.
Anyhow, we know what life was like before Great Society programs, and it wasn't higher wages for the poor, we've just forgotten because it's been so successful. That memory hole oddly works in favor of both those who promote expanding welfare and those who oppose it.
> Walmart couldn’t pay $12/hr. if tax exemptions and SNAP and other aid didn’t fill the gap.
From a basic macro economic standpoint, most welfare programs push wages up by marginally reducing the labor pool. In a free market, how would Walmart be forced to pay a "livable wage" if entitlements didn't exist? Do you really think people would just choose not to work and starve if their wages didn't cover all their expenses? Out of spite? It doesn't make sense, and it certainly doesn't comport with history. It makes even less sense when people buy this argument yet also support minimum wage laws.
The counterexample is the Earned Income Tax Credit (EITC). EITC increases as your wages increase, theoretically incentivizing work, rather than diminishing as you earn more. This would increase labor supply. What tends to happen to prices (i.e. wages--price of labor) when supply increases but not demand? Presumably the more cogent literature bemoaning Walmart's labor practices is primarily relying on EITC while hoping the reader glosses over the distinction.
That literature is playing fast & loose with terminology to justify a preexisting conclusion.
Anyhow, we know what life was like before Great Society programs, and it wasn't higher wages for the poor, we've just forgotten because it's been so successful. That memory hole oddly works in favor of both those who promote expanding welfare and those who oppose it.
> Walmart couldn’t pay $12/hr. if tax exemptions and SNAP and other aid didn’t fill the gap.
From a basic macro economic standpoint, most welfare programs push wages up by marginally reducing the labor pool. In a free market, how would Walmart be forced to pay a "livable wage" if entitlements didn't exist? Do you really think people would just choose not to work and starve if their wages didn't cover all their expenses? Out of spite? It doesn't make sense, and it certainly doesn't comport with history. It makes even less sense when people buy this argument yet also support minimum wage laws.
The counterexample is the Earned Income Tax Credit (EITC). EITC increases as your wages increase, theoretically incentivizing work, rather than diminishing as you earn more. This would increase labor supply. What tends to happen to prices (i.e. wages--price of labor) when supply increases but not demand? Presumably the more cogent literature bemoaning Walmart's labor practices is primarily relying on EITC while hoping the reader glosses over the distinction.
> Anyhow, we know what life was like before Great Society programs, and it wasn't higher wages for the poor, we've just forgotten because it's been so successful.
That doesn't tell you the answer because the programs were instituted prior to the productivity increases in the 20th century. Are people better off now than they were before the general availability of electric light or mechanized transportation? Probably, but that doesn't mean you can trace the development of modern agriculture to the existence of SNAP.
> In a free market, how would Walmart be forced to pay a "livable wage" if entitlements didn't exist?
People frequently have choices between jobs that are easier or otherwise more pleasant and jobs that pay more. For example, long-haul truck drivers get paid significantly more than short-haul drivers, but they also sleep in their trucks and don't get to see their families most nights. Likewise, a lot of jobs require you to get a degree or certification, which can be a lot of work, which people may not be willing to do if they don't need to.
If you give them "benefits" then they take the easier job over the better paying one. Which allows the employer offering the easier job to pay less and still get applicants. It also creates a poverty trap if the benefits are contingent on not making more money, because then the compensation advantage of the higher-paying job is much smaller -- in some cases negative.
> EITC increases as your wages increase, theoretically incentivizing work, rather than diminishing as you earn more.
Except that it does diminish as you earn more, because it has an aggressive phase out. For a single person with no dependents, the phase out kicks in below federal minimum wage. If you had a minimum wage job at 30 hours a week and wanted to work 40 hours, increasing your hours would cause you to receive a smaller EITC.
There is a reason the EITC represents ~0.1% of the federal budget, and it's not because it's a bad idea, it's because it's implemented in a way that prevents people from getting much from it.
That doesn't tell you the answer because the programs were instituted prior to the productivity increases in the 20th century. Are people better off now than they were before the general availability of electric light or mechanized transportation? Probably, but that doesn't mean you can trace the development of modern agriculture to the existence of SNAP.
> In a free market, how would Walmart be forced to pay a "livable wage" if entitlements didn't exist?
People frequently have choices between jobs that are easier or otherwise more pleasant and jobs that pay more. For example, long-haul truck drivers get paid significantly more than short-haul drivers, but they also sleep in their trucks and don't get to see their families most nights. Likewise, a lot of jobs require you to get a degree or certification, which can be a lot of work, which people may not be willing to do if they don't need to.
If you give them "benefits" then they take the easier job over the better paying one. Which allows the employer offering the easier job to pay less and still get applicants. It also creates a poverty trap if the benefits are contingent on not making more money, because then the compensation advantage of the higher-paying job is much smaller -- in some cases negative.
> EITC increases as your wages increase, theoretically incentivizing work, rather than diminishing as you earn more.
Except that it does diminish as you earn more, because it has an aggressive phase out. For a single person with no dependents, the phase out kicks in below federal minimum wage. If you had a minimum wage job at 30 hours a week and wanted to work 40 hours, increasing your hours would cause you to receive a smaller EITC.
There is a reason the EITC represents ~0.1% of the federal budget, and it's not because it's a bad idea, it's because it's implemented in a way that prevents people from getting much from it.
> People frequently have choices between jobs that are easier or otherwise more pleasant and jobs that pay more. For example, long-haul truck drivers get paid significantly more than short-haul drivers, but they also sleep in their trucks and don't get to see their families most nights. Likewise, a lot of jobs require you to get a degree or certification, which can be a lot of work, which people may not be willing to do if they don't need to.
That's a slight of hand. There's value in choice, and that value is being reaped by the worker precisely because poverty programs make it possible.
But let's go with that example. You're assuming the number of truckers and trucker-hours would remain constant. But they wouldn't. That's just not how dynamic systems work. There are other people for whom short-haul trucking is the less desirable choice than what they're doing now, or who work fewer hours than they're doing now. Without the welfare subsidies, the supply of short-haul trucking labor would likely increase--more people working more hours. Similarly, you're assuming the demand for short-haul trucking would remain the same at higher wages. But demand in economics is not the same thing as "I would like" or even "I need", and at higher wages the demand would likely diminish.
The whole argument is the economics equivalent of a perpetual motion machine, and it's sold by throwing contrived complexity at people and hoping they don't think it through. Like perpetual motion or free energy machines, at the most miniscule scale there are exceptions and caveats (maybe short-haul wages in particular would rise, especially after accounting for the totality of labor economy changes), but those exceptions don't scale to a systems level. That doesn't stop con artists from selling their Rube Goldberg machines, though, knowing the vast majority of people won't think it through.
What the rhetoric is trying to do is bolster support for a livable wage through radical policy changes by drumming up anti-corporate sentiment. It's in service of a normative argument (a "livable wage" is a reasonable social ask, IMO, notwithstanding its amorphous nature), but disguised as a scientific argument that can only result in failure by setting wrong expectations about how markets and policy operate, ultimately reinforcing cynicism.
That's a slight of hand. There's value in choice, and that value is being reaped by the worker precisely because poverty programs make it possible.
But let's go with that example. You're assuming the number of truckers and trucker-hours would remain constant. But they wouldn't. That's just not how dynamic systems work. There are other people for whom short-haul trucking is the less desirable choice than what they're doing now, or who work fewer hours than they're doing now. Without the welfare subsidies, the supply of short-haul trucking labor would likely increase--more people working more hours. Similarly, you're assuming the demand for short-haul trucking would remain the same at higher wages. But demand in economics is not the same thing as "I would like" or even "I need", and at higher wages the demand would likely diminish.
The whole argument is the economics equivalent of a perpetual motion machine, and it's sold by throwing contrived complexity at people and hoping they don't think it through. Like perpetual motion or free energy machines, at the most miniscule scale there are exceptions and caveats (maybe short-haul wages in particular would rise, especially after accounting for the totality of labor economy changes), but those exceptions don't scale to a systems level. That doesn't stop con artists from selling their Rube Goldberg machines, though, knowing the vast majority of people won't think it through.
What the rhetoric is trying to do is bolster support for a livable wage through radical policy changes by drumming up anti-corporate sentiment. It's in service of a normative argument (a "livable wage" is a reasonable social ask, IMO, notwithstanding its amorphous nature), but disguised as a scientific argument that can only result in failure by setting wrong expectations about how markets and policy operate, ultimately reinforcing cynicism.
> There's value in choice, and that value is being reaped by the worker precisely because of poverty programs make it possible.
It seems like you're ignoring the same thing you're objecting to: It's a dynamic system.
If long-haul trucking companies offer less desirable but higher paying jobs and easier jobs aren't paying a living wage then people would pick the harder job that lets them not starve. Which means the easier jobs would have to pay more in order to attract workers, unless those workers can get government assistance. If they can, the easier jobs can get people to work without paying more, because the assistance programs let them pick the easier job even at lower pay. In other words, the subsidies were supposed to go to the poor and instead they went to the lower-paying employers.
In a dynamic system the long-haul companies would then have to respond if it became more desirable to work somewhere the pay is low enough to get government assistance, but the phase outs give the low-paying employers another advantage.
Say the undesirability of the job is good for $15k/year in additional compensation. However, if you got paid $15k more, you'd lose $10k to government benefit phase outs and additional taxes. To actually get paid $15k more, you'd have to "get paid" $45k more. Which is to say, the employer with the low-paying job can pay you $45k less.
But it's a dynamic system, so they might "only" pay you $35k less and then hire more people. The trucking companies would then have to pay $45k more than them when it used to be $15k. Even with Walmart paying less than before, their relative advantage has increased. And there are two ways to get something a long distance over land: A long-haul truck the whole way, or a short-haul truck to the rail yard, a freight train, and then another short-haul truck. So then instead of a truck driver getting higher pay per mile over 2000 miles of driving, a different one gets lower pay per mile over 60 miles of driving twice, and a rail company gets the rest.
So the low-wage subsidies cause the amount of higher-wage labor demand to go down by making it less competitive with non-labor alternatives to perform the same function, as labor is diverted to the lower-paying jobs even while enabling them to pay even less.
> There are other people for whom short-haul trucking is the less desirable choice than what they're doing now, or who work fewer hours than they're doing now.
All of that is already baked in to the existing numbers; the long-haul drivers get paid more because fewer people want to do it.
> Like perpetual motion or free energy machines, at the most miniscule scale there are exceptions and caveats, but those exceptions don't scale to a systems level.
Only they're not exceptions. If you subsidize something you get more of it. What happens if you subsidize low-paying jobs but not higher-paying jobs?
It seems like you're ignoring the same thing you're objecting to: It's a dynamic system.
If long-haul trucking companies offer less desirable but higher paying jobs and easier jobs aren't paying a living wage then people would pick the harder job that lets them not starve. Which means the easier jobs would have to pay more in order to attract workers, unless those workers can get government assistance. If they can, the easier jobs can get people to work without paying more, because the assistance programs let them pick the easier job even at lower pay. In other words, the subsidies were supposed to go to the poor and instead they went to the lower-paying employers.
In a dynamic system the long-haul companies would then have to respond if it became more desirable to work somewhere the pay is low enough to get government assistance, but the phase outs give the low-paying employers another advantage.
Say the undesirability of the job is good for $15k/year in additional compensation. However, if you got paid $15k more, you'd lose $10k to government benefit phase outs and additional taxes. To actually get paid $15k more, you'd have to "get paid" $45k more. Which is to say, the employer with the low-paying job can pay you $45k less.
But it's a dynamic system, so they might "only" pay you $35k less and then hire more people. The trucking companies would then have to pay $45k more than them when it used to be $15k. Even with Walmart paying less than before, their relative advantage has increased. And there are two ways to get something a long distance over land: A long-haul truck the whole way, or a short-haul truck to the rail yard, a freight train, and then another short-haul truck. So then instead of a truck driver getting higher pay per mile over 2000 miles of driving, a different one gets lower pay per mile over 60 miles of driving twice, and a rail company gets the rest.
So the low-wage subsidies cause the amount of higher-wage labor demand to go down by making it less competitive with non-labor alternatives to perform the same function, as labor is diverted to the lower-paying jobs even while enabling them to pay even less.
> There are other people for whom short-haul trucking is the less desirable choice than what they're doing now, or who work fewer hours than they're doing now.
All of that is already baked in to the existing numbers; the long-haul drivers get paid more because fewer people want to do it.
> Like perpetual motion or free energy machines, at the most miniscule scale there are exceptions and caveats, but those exceptions don't scale to a systems level.
Only they're not exceptions. If you subsidize something you get more of it. What happens if you subsidize low-paying jobs but not higher-paying jobs?
This seems like an overly complicated phrasing of the much simpler "are progressive taxes and social safety nets actually bad?"
Yes, all members of the state should benefit from state programs. There is little value in adding an exclusionary check to state programs.
Yes but ideas exist like FairTax which directly address this issue in some fashion. It's easy to come up with reasons why something won't work, it is a lot harder to find solutions.
Payroll taxes are the worst for small companies followed by strong labor law. Strong Labor laws are good if the company has 500-1000+ people but not able to fire someone within the month with reason is just dumb (I’m looking at Europe). It indeed causes many startups to hire 50% less people than they can.
I honestly don’t understand taxing anyone making less than something like 500K.
Don’t tax anyone earns less than this, focus all tax collection to top 1% and all big corps that makes more than 5M a year. With all those resource if this can be collected and obvious loopholes patched that’s it.
This would not only bring more tax, but also would fuel massive growth on the bottom line in terms startups and tons of innovation on the medium sized companies.
I honestly don’t understand taxing anyone making less than something like 500K.
Don’t tax anyone earns less than this, focus all tax collection to top 1% and all big corps that makes more than 5M a year. With all those resource if this can be collected and obvious loopholes patched that’s it.
This would not only bring more tax, but also would fuel massive growth on the bottom line in terms startups and tons of innovation on the medium sized companies.
> focus all tax collection to top 1%
Most of the "we should just get all the taxes from rich people" arguments ignore two fairly important things.
The first is how asset markets works, i.e. why rich people are rich. It's because there are finitely many assets and whenever anyone rich gets more money, they use it to bid up the prices. But that makes high taxes on rich people do something unintuitive at scale: It takes away the money that was making the stock market go up. And then not only do they have less money, they also have less income, because the people who would have paid them for their stock also have less money, which makes stock prices go down. Which means that increasing their tax rate from e.g. 25% to 50% doesn't generate anywhere close to twice as much revenue, and it also lowers the growth rate in the tax revenue you get from them. Which means that raising the rate will, in the long term, inherently generate less revenue. Whether you end up underwater in 48 months or 48 years depends on what the existing and proposed rates are and what the economy looks like, but there is always some period of time after which a reduction in the compounding rate is going to absorb any percentage increase in the tax rate. At which point you're paying the recurring costs and lower compounding rate from the higher tax rate indefinitely in exchange for no additional revenue, and indeed for less government revenue.
And the second is that Congress wants money to spend, so they're going to do the things that cause them to have more money to spend. Now imagine what kind of non-tax policies they're going to implement if the tax system makes it so the only way they get more money to spend is if they transfer wealth from the poor to the rich. We don't actually have an effective solution to the principal-agent problem, so perverse incentives are bad, right?
Most of the "we should just get all the taxes from rich people" arguments ignore two fairly important things.
The first is how asset markets works, i.e. why rich people are rich. It's because there are finitely many assets and whenever anyone rich gets more money, they use it to bid up the prices. But that makes high taxes on rich people do something unintuitive at scale: It takes away the money that was making the stock market go up. And then not only do they have less money, they also have less income, because the people who would have paid them for their stock also have less money, which makes stock prices go down. Which means that increasing their tax rate from e.g. 25% to 50% doesn't generate anywhere close to twice as much revenue, and it also lowers the growth rate in the tax revenue you get from them. Which means that raising the rate will, in the long term, inherently generate less revenue. Whether you end up underwater in 48 months or 48 years depends on what the existing and proposed rates are and what the economy looks like, but there is always some period of time after which a reduction in the compounding rate is going to absorb any percentage increase in the tax rate. At which point you're paying the recurring costs and lower compounding rate from the higher tax rate indefinitely in exchange for no additional revenue, and indeed for less government revenue.
And the second is that Congress wants money to spend, so they're going to do the things that cause them to have more money to spend. Now imagine what kind of non-tax policies they're going to implement if the tax system makes it so the only way they get more money to spend is if they transfer wealth from the poor to the rich. We don't actually have an effective solution to the principal-agent problem, so perverse incentives are bad, right?
focus all tax collection to top 1%
If you do that in the USA, you're ignoring 79% of income. The top 1% earn a lot more than average but they're still small in number, and their collective income is only 21% of the total.
(And the USA is uncommonly high as regards income share received by the top 1%; Canada is at 11.5% and is fairly typical.)
If you do that in the USA, you're ignoring 79% of income. The top 1% earn a lot more than average but they're still small in number, and their collective income is only 21% of the total.
(And the USA is uncommonly high as regards income share received by the top 1%; Canada is at 11.5% and is fairly typical.)
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Not taxing anyone under 500k would remove a very large share of tax revenue. Combining that with higher corporate taxes would be nice, but if it got pushed too high (which it would in this scenario) we would simply see corporate flight from the US to elsewhere or it would eliminate practically all the benefit of lower taxes from the less wealthy as the cost of goods would skyrocket.
There isn't really a silver bullet unless people in the US as a whole culturally become less consumerist and our entire economy is restructured around that fact.
There isn't really a silver bullet unless people in the US as a whole culturally become less consumerist and our entire economy is restructured around that fact.
> we would simply see corporate flight from the US
Good. If they don't want to pay for the physical and legal infrastructure to make their business possible here, then they can go elsewhere. I'm so tired of this cowardly excuse.
Good. If they don't want to pay for the physical and legal infrastructure to make their business possible here, then they can go elsewhere. I'm so tired of this cowardly excuse.
People who also say 'the rich will just stop' ignore that the rich work crazy hard trying to ensure they add to their billions. They already are past the point of noticeable returns for their quality of life, yet they keep at it.
In return for their super high taxes we should give them a 'contributor to society' chit or star or something. Then they can gamify over getting chits, instead of hundreds of billions more. I'll happily call Elon a '7 star citizen' and support such a game.
In return for their super high taxes we should give them a 'contributor to society' chit or star or something. Then they can gamify over getting chits, instead of hundreds of billions more. I'll happily call Elon a '7 star citizen' and support such a game.
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It's not an "excuse". I'm just saying what would happen. I'm not against raising corporate taxes and patching loopholes. I just know there would also be unintended consequences for even the less wealthy that many don't consider.
> I honestly don’t understand taxing anyone making less than something like 500K.
Don’t tax anyone earns less than this, focus all tax collection to top 1%
Top 1% currently contribute 40-42% of taxes.
Top 10% contribute 72-75%.
The bottom 50% contribute only 2-3%.
Top 1% currently contribute 40-42% of taxes.
Top 10% contribute 72-75%.
The bottom 50% contribute only 2-3%.
These numbers are useless unless you give me everyone's comparative worth.
If a top 1% individual is worth 1000x more than a bottom 50% individual, I would expect the numbers to be higher. If they are only worth 10x as much, it seems out of line and unfair to the higher payers.
If a top 1% individual is worth 1000x more than a bottom 50% individual, I would expect the numbers to be higher. If they are only worth 10x as much, it seems out of line and unfair to the higher payers.
> These numbers are useless unless you give me everyone's comparative worth.
If a top 1% individual is worth 1000x more than a bottom 50% individual, I would expect the numbers to be higher. If they are only worth 10x as much, it seems out of line and unfair to the higher payers.
Bottom 50% earners make on average 20-25k. Top 1% earners make on average 800k-1m.
So top 1% average income is 35 -45x higher than bottom 50%.
Bottom 50% earn 11-13% of total US income. Top 1% earners 20-22% of total US income.
I don’t have an opinion of fairness either way. I’m just sharing data.
Bottom 50% earners make on average 20-25k. Top 1% earners make on average 800k-1m.
So top 1% average income is 35 -45x higher than bottom 50%.
Bottom 50% earn 11-13% of total US income. Top 1% earners 20-22% of total US income.
I don’t have an opinion of fairness either way. I’m just sharing data.
> Payroll taxes are inefficient
I agree, but governments intentionally shifted from corporate taxes (taxes on net, corporate income) to payroll taxes (taxes proportional to employee wages) because businesses were either finding creatives ways of deferring/diverting income, or they just weren't taking profit (and, thus, nothing to tax).
See the third graph here (yellow line vs. dark blue line) https://taxpolicycenter.org/briefing-book/what-are-sources-r...
I agree, but governments intentionally shifted from corporate taxes (taxes on net, corporate income) to payroll taxes (taxes proportional to employee wages) because businesses were either finding creatives ways of deferring/diverting income, or they just weren't taking profit (and, thus, nothing to tax).
See the third graph here (yellow line vs. dark blue line) https://taxpolicycenter.org/briefing-book/what-are-sources-r...
Corporate taxes are inefficient as well as they discourage reinvestment by the company, since the State taxes a rake each year. Taxing on dividends paid (and buybacks) is better, even if it leads to higher prices to compensate for the lower capital profitability for shareholders (who compete with bonds).
How are sales tax AI proof? AI doesn't tend to buy stuff.
AI is used to make products. Those products have to be sold. The revenue from the sales is taxed. Unless you live in a post-money society, as long as there is a monetary exchange you can tax consumption.
Sales taxes are regressive and nonsensical, why punish people because they contribute to the economy by buying stuff? Just do income tax.
I don't disagree with the first part, but income tax falls into the exact same logic of "why punish people because they contribute to the economy by [working]?"
Well, we do need taxes. Land taxes are fine too I guess, but I doubt they'll catch on in North America (too many politicians own real estate).
You don't contribute by buying stuff but by producing it. And the regressive effect can be reduced by having different rates depending on the type of product.
> Reality: It’s not fear; it’s math. If 30% of the workforce is displaced, and the remaining 70% have to pay for the social safety net (or UBI) required to keep the displaced alive, the math breaks.
What evidence does the author have that 30% of the workforce will be displaced (not to mention unable to find another job)? The author also doesn't seem to take into account that AI is also making new jobs: https://www.economist.com/business/2025/12/14/job-apocalypse...
What evidence does the author have that 30% of the workforce will be displaced (not to mention unable to find another job)? The author also doesn't seem to take into account that AI is also making new jobs: https://www.economist.com/business/2025/12/14/job-apocalypse...
In 1983, the tax base was 90%, today 80%. To lose 30% of 80% is only a 24% decrease. at 80%, SS is insolvent in 2053, at 56%? certainly insolvent sooner, but all we need to do is increase the taxable maximum and the Rich will be brought into the tax paying population again. Solving the problem.
Do these companies seriously not see a MASSIVE AI tax coming? Gov't wants its money, doesn't matter if its clean or not, as long as it gets its cut.
Do these companies seriously not see a MASSIVE AI tax coming? Gov't wants its money, doesn't matter if its clean or not, as long as it gets its cut.
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What a weak argument against the “it’s just a tool” defense.
Setting aside the tax discussion for a moment:
> In the end, the “shortcut” had cost her more time than if she’d just done the work herself from the start.
I had this same opinion on AI IDE Copilots about a year and a half ago. They were too nascent, and writing code manually saved me hours of debugging their buggy code recommendations.
Fast forward - today—IDE Copilots have grown leaps and bounds in its quality of outputs. They have real utility now.
It's important to note that - "This is the worst AI agents will ever be, it will only get better moving forward."
I'm confident these tools will keep improving and eventually create net productivity gains, including for the Excel use case you mentioned.
> In the end, the “shortcut” had cost her more time than if she’d just done the work herself from the start.
I had this same opinion on AI IDE Copilots about a year and a half ago. They were too nascent, and writing code manually saved me hours of debugging their buggy code recommendations.
Fast forward - today—IDE Copilots have grown leaps and bounds in its quality of outputs. They have real utility now.
It's important to note that - "This is the worst AI agents will ever be, it will only get better moving forward."
I'm confident these tools will keep improving and eventually create net productivity gains, including for the Excel use case you mentioned.
The solution is to stop taxing human labor/income and to start taxing every financial transaction, from buying a piece of candy, a computer component, a service, a house, a data center, or a share of stock, etc.
Just the volume of Equities + TRACE fixed income/structured + munis + real estate is over $200Trillion. A mere 3% tax on those would put the $6T US budget in large surplus. Add $1.7 Quadrillion of ovrerall payments and a 0.3% tax on transactions (yes, $3 per $1000) would also put the US budget in surplus.
All of it would also involve far less tracking and bureaucratic overhead, and indeed far less govt intrusion into people's lives (i.e., not digging into every source and amount of income).
Just the volume of Equities + TRACE fixed income/structured + munis + real estate is over $200Trillion. A mere 3% tax on those would put the $6T US budget in large surplus. Add $1.7 Quadrillion of ovrerall payments and a 0.3% tax on transactions (yes, $3 per $1000) would also put the US budget in surplus.
All of it would also involve far less tracking and bureaucratic overhead, and indeed far less govt intrusion into people's lives (i.e., not digging into every source and amount of income).
Also gains on sales of things like stocks and commodities should be taxed proportionally to how briefly they are owned, with an asymptote approaching 100% for HFT.
And no basis reset upon inheritance.
And no basis reset upon inheritance.
YES!! I've long thought the tax rates on cap gains should be extremely progressive with holding time, ranging from 99%+ for sub-second holding (HFT) to sub 5% for decade+ holding periods. This would also effectively eliminate the utility of basis reset on inheritance, since the rate for multi-decade holding goes so low.
Also a great idea I saw recently is to treat any encumbrance of a capital asset as a realization event. For example, early investors in a company holding stock may have $millions in unrealized gains. Those gains are 'realized' and taxed on sale of the stock. However, if they take a loan using the stock as collateral, it is not taxed because there is a matching obligation to repay the loan and the stock ownership doesn't change (except in a default). Such loans should be taxed as a realization event, since they are pledging the stock at its current value, not its comparatively microscopic original purchase value.
Also a great idea I saw recently is to treat any encumbrance of a capital asset as a realization event. For example, early investors in a company holding stock may have $millions in unrealized gains. Those gains are 'realized' and taxed on sale of the stock. However, if they take a loan using the stock as collateral, it is not taxed because there is a matching obligation to repay the loan and the stock ownership doesn't change (except in a default). Such loans should be taxed as a realization event, since they are pledging the stock at its current value, not its comparatively microscopic original purchase value.
I in principle agree, but it’s very hard to implement a progressive tax system if the basis is consumption (or “financial transactions”)
How not; wouldn't it be straightforward to have tax rate tables based on transaction size? E.g., transaction <$10=0, <$100=0.1%, <$10k=0.2%, <$100k=0.3%, <$1MM=0.4%, =>$1MM=0.5%, with restructuring payments to avoid taxes to carry heavy penalties.
Not many poor people will be making million-dollar+ transactions, and it seems like taxing ALL transactions will help make the rich pay their fair share, as their money tends to have low velocity relative to consumer goods, but they still do a lot of transactions.
EDIT: Also it should have zero taxes on necessities such as food & non-luxury clothing, similarly to how current state/local sales taxes work.
Also, if there is sufficient tax rate and income to do UBI to above poverty level, wouldn't the need for a progressive tax structure become obsolete?
Not many poor people will be making million-dollar+ transactions, and it seems like taxing ALL transactions will help make the rich pay their fair share, as their money tends to have low velocity relative to consumer goods, but they still do a lot of transactions.
EDIT: Also it should have zero taxes on necessities such as food & non-luxury clothing, similarly to how current state/local sales taxes work.
Also, if there is sufficient tax rate and income to do UBI to above poverty level, wouldn't the need for a progressive tax structure become obsolete?
When you say transactions, what are you thinking of? I was thinking of your usual VAT/GST - in that case any sort of progressive tax would be hell for small businesses (or large ones) to implement.
If you’re talking about banks taxing financial transactions, that’s something I haven’t really thought through- it would have some interesting side effects and work arounds.
I like the simplicity of a flat consumption tax combined with a UBI - I’m not sure how politically viable it is, though.
If you’re talking about banks taxing financial transactions, that’s something I haven’t really thought through- it would have some interesting side effects and work arounds.
I like the simplicity of a flat consumption tax combined with a UBI - I’m not sure how politically viable it is, though.
I'm not sure how politically viable it is either — the wealthy owners of congresspeople will scream like they are being murdered.
I wasn't thinking of any kind of VAT, where you need to subtract out your cost, etc.; that is a mess! Just a straight shaving off the transaction. The idea is to spread it over so many transactions the rates are so low it isn't worth bothering to work around.
For example, if you try to structure a $1million house purchase into ten %$99,999 payments to get from 0.5% down to 0.4% rate, you will save a grand total of $1000, hardly worth it considering there should also be laws with strong penalties for such structuring.
I wasn't thinking of any kind of VAT, where you need to subtract out your cost, etc.; that is a mess! Just a straight shaving off the transaction. The idea is to spread it over so many transactions the rates are so low it isn't worth bothering to work around.
For example, if you try to structure a $1million house purchase into ten %$99,999 payments to get from 0.5% down to 0.4% rate, you will save a grand total of $1000, hardly worth it considering there should also be laws with strong penalties for such structuring.
<< A person was venting to a friend about being forced to use AI
I am not sure I understand the opinion piece listed, but it does have one fragment that I can confirm as happening and it is that the use is effectively being mandated. Take it as you will, but my company rolled out next year's goals. Can you take a guess as to what they contain and what people will do to accomplish those goals. Hang in tight. It is going to be a bumpy ride. And here is a thing, I actually like this tech.
I am not sure I understand the opinion piece listed, but it does have one fragment that I can confirm as happening and it is that the use is effectively being mandated. Take it as you will, but my company rolled out next year's goals. Can you take a guess as to what they contain and what people will do to accomplish those goals. Hang in tight. It is going to be a bumpy ride. And here is a thing, I actually like this tech.
AI employees are not employees. They are tools, not people.
The fallacy here is applying a closed world assumption where the amount of code doesn't change but more of it is written by AIs and sold for the same dollar amount. And therefore less taxes get paid. That assumption is wrong; and so are the conclusions and sand castles built on it.
The reality is that whenever we give programmers better tools, we get more programmers, not less. And then they start creating even more software than before. Also the value of software drops but the amount spent on software grows. That's because economies grow when you drop the cost of something and create more demand for that stuff. In this case software. Where in the past some companies might not have bothered with an app or a website or automation, many now do have some of that stuff. And now they get to raise the ambition level and maybe see if they can automate some more of their internal processes.
Most companies won't do that themselves. They'll pay others to do this for them. And those people and companies will compete with each other on who does the best job most cheaply for a given return on investment. Which is nothing new. The winners will likely be leaning heavily on AI tools to earn handsomely for solutions that deliver some kind of value. They'll want better/smarter apps, deeper integrations with stuff, more automation, a sprinkling of AI, and whatever else makes their companies run better and earn more money.
AI tools themselves are already a commodity and just a means to an end. Anyone can use them. But only some know how to use them well. The skill is in understanding how to use them, what to fix, where to apply them, etc. Those wielding them best will line up more happy customers and revenue. And then they pay their taxes. Over the value they created.
They here being companies that increase their profits, software companies that charge for helping them do that, people employed by those companies, and AI infrastructure and other suppliers that are part of the solution here. Economies grow over time. VAT, profit tax, income tax, etc.
There's a lot of work that will need to happen over the next few decades to pull a lot of this planets industries out of last century. Anyone that believes it's all going to be AIs doing that by themselves more or less unprompted is dreaming. This is going to be a lot of work that will involve a lot of investment for potentially very big returns on investment. A lot of that work wasn't happening because it was too hard or expensive. It just got cheaper, so more of it will start happening now. There's plenty left to do.
The fallacy here is applying a closed world assumption where the amount of code doesn't change but more of it is written by AIs and sold for the same dollar amount. And therefore less taxes get paid. That assumption is wrong; and so are the conclusions and sand castles built on it.
The reality is that whenever we give programmers better tools, we get more programmers, not less. And then they start creating even more software than before. Also the value of software drops but the amount spent on software grows. That's because economies grow when you drop the cost of something and create more demand for that stuff. In this case software. Where in the past some companies might not have bothered with an app or a website or automation, many now do have some of that stuff. And now they get to raise the ambition level and maybe see if they can automate some more of their internal processes.
Most companies won't do that themselves. They'll pay others to do this for them. And those people and companies will compete with each other on who does the best job most cheaply for a given return on investment. Which is nothing new. The winners will likely be leaning heavily on AI tools to earn handsomely for solutions that deliver some kind of value. They'll want better/smarter apps, deeper integrations with stuff, more automation, a sprinkling of AI, and whatever else makes their companies run better and earn more money.
AI tools themselves are already a commodity and just a means to an end. Anyone can use them. But only some know how to use them well. The skill is in understanding how to use them, what to fix, where to apply them, etc. Those wielding them best will line up more happy customers and revenue. And then they pay their taxes. Over the value they created.
They here being companies that increase their profits, software companies that charge for helping them do that, people employed by those companies, and AI infrastructure and other suppliers that are part of the solution here. Economies grow over time. VAT, profit tax, income tax, etc.
There's a lot of work that will need to happen over the next few decades to pull a lot of this planets industries out of last century. Anyone that believes it's all going to be AIs doing that by themselves more or less unprompted is dreaming. This is going to be a lot of work that will involve a lot of investment for potentially very big returns on investment. A lot of that work wasn't happening because it was too hard or expensive. It just got cheaper, so more of it will start happening now. There's plenty left to do.
I agree. It's not like we're ever going to get to a state where we say "oh wow, all potential work is done, there's literally nothing left to do".
Like pretty much every technical innovation in history, when we have access to more tools, we just figure out how to solve bigger problems. People might have felt bad for horse breeders who lots out when planes, trains, and automobiles became ubiquitous, but people adapted around it. Now people can work and travel around the world, and there are industries around all these things. It's generally applied to parallelism, but I think it applies here: https://en.wikipedia.org/wiki/Gustafson%27s_law
While I've had my issues with the "vibe coding" performance right now, ultimately if I can get something to handle the boring and tedious parts of programming, then that frees up time for me to focus on stuff that I find more fun or interesting, or at the very least it frees me up to work on more complicated problems instead of spending half a day writing and deploying yet another "move stuff from one Kafka topic to another Kafka topic" program.
Like pretty much every technical innovation in history, when we have access to more tools, we just figure out how to solve bigger problems. People might have felt bad for horse breeders who lots out when planes, trains, and automobiles became ubiquitous, but people adapted around it. Now people can work and travel around the world, and there are industries around all these things. It's generally applied to parallelism, but I think it applies here: https://en.wikipedia.org/wiki/Gustafson%27s_law
While I've had my issues with the "vibe coding" performance right now, ultimately if I can get something to handle the boring and tedious parts of programming, then that frees up time for me to focus on stuff that I find more fun or interesting, or at the very least it frees me up to work on more complicated problems instead of spending half a day writing and deploying yet another "move stuff from one Kafka topic to another Kafka topic" program.
What is the world is an "AI employee"?
I guess something like a Dishwasher employee or a Truck employee.
It's an employee that has been replaced by AI.
Maybe we should tax computers entirely
https://en.wikipedia.org/wiki/Computer_(occupation)
https://en.wikipedia.org/wiki/Computer_(occupation)
Currently, companies employ humans.
Companies pay payroll taxes and employees pay income taxes. The state makes money to pay for social services.
When companies begin replacing humans with cold, dead infrastructure, that infrastructure doesn't pay taxes. Payroll and income taxes revenues are gone.
Furthermore, those humans aren't making an income with which to further stimulate the economy. They can't pay for the goods and services of other companies. No sales taxes. Consumer businesses lose revenue. Then no servicing businesses. B2B then sees second order pullback. Then those employees... The whole economy's interconnectedness and ecological food web begin to disappear if this happens.
I have no idea what the future holds for post-AI society. I tend to be much more positive in my outlook of this technology than most, but it truly could diverge from our predictions in unexpected ways.
Elon saying (paraphrasing) "everyone gets super wealthy because of AI" seems unlikely. You see how we treat homeless people. I do think we'll wind up on median/average wealthier and with less work, but that's not a given.
The really dark view is that we'll have massive concentration camps and human genocide for poor people (read: us) or all humans (if ASI happens), but that seems even more fantastically fictional.
We should start thinking about taxes and employment now, though.
Companies pay payroll taxes and employees pay income taxes. The state makes money to pay for social services.
When companies begin replacing humans with cold, dead infrastructure, that infrastructure doesn't pay taxes. Payroll and income taxes revenues are gone.
Furthermore, those humans aren't making an income with which to further stimulate the economy. They can't pay for the goods and services of other companies. No sales taxes. Consumer businesses lose revenue. Then no servicing businesses. B2B then sees second order pullback. Then those employees... The whole economy's interconnectedness and ecological food web begin to disappear if this happens.
I have no idea what the future holds for post-AI society. I tend to be much more positive in my outlook of this technology than most, but it truly could diverge from our predictions in unexpected ways.
Elon saying (paraphrasing) "everyone gets super wealthy because of AI" seems unlikely. You see how we treat homeless people. I do think we'll wind up on median/average wealthier and with less work, but that's not a given.
The really dark view is that we'll have massive concentration camps and human genocide for poor people (read: us) or all humans (if ASI happens), but that seems even more fantastically fictional.
We should start thinking about taxes and employment now, though.
Yes, but the idea of demand for a given type of labor falling due to automation isn't a new one and it's not clear what this "AI employee" framing gives us over thinking of it in those terms.
AI agents that replace employees and can be deployed in any data center.
> Reality: Tractors magnified physical labor; they didn’t simulate the mind. More importantly, the industrial revolution took decades. The AI displacement is happening in quarters.
Tractors are a tool - a force multiplier in getting work done - just like AI-based tooling is.
Self-checkout is taking away jobs from checkout clerks. Should we forbid self-checkout in order to maintain job security? It's the same argument.
Rewind the clock to the late 1800s and this same post could have been written about cars taking away jobs from horses.
Tractors are a tool - a force multiplier in getting work done - just like AI-based tooling is.
Self-checkout is taking away jobs from checkout clerks. Should we forbid self-checkout in order to maintain job security? It's the same argument.
Rewind the clock to the late 1800s and this same post could have been written about cars taking away jobs from horses.
see a lot of horses around lately?
Economists often talk about substituting capital for labor. It's certainly common in countries, such as the US, where labor is relatively expensive.
I think it's perfectly reasonable to change the tax system to make sure there's no tax advantage to substituting capital for labor, or for that matter, labor for capital. I have no idea what changes would be needed, but there's no reason that using AI should have significant tax implications.
I think it's perfectly reasonable to change the tax system to make sure there's no tax advantage to substituting capital for labor, or for that matter, labor for capital. I have no idea what changes would be needed, but there's no reason that using AI should have significant tax implications.
So "Corporate profit taxes are a game of hide-and-seek", but "you can tax the value flow, the revenue generated in-country, or the massive energy consumption of the data centers"?
The author acts as if taxes are not a completely fluid system, that will quickly adept to ensure revenue keeps flowing, squeezing wherever the squeezing is the juiciest. It does not need cautious calibration.
The author acts as if taxes are not a completely fluid system, that will quickly adept to ensure revenue keeps flowing, squeezing wherever the squeezing is the juiciest. It does not need cautious calibration.
What if AI can greatly reduce the amount of money (i.e. tax receipts) that the government needs to function properly? What if AI can quickly determine who really qualifies for government assistance, and cuts off all the fraudsters without needing an army of bureaucrats?
We could even cut out a ton of middle-men and return congress to a part-time job. One can only dream, right?
We could even cut out a ton of middle-men and return congress to a part-time job. One can only dream, right?
> What if AI can quickly determine who really qualifies for government assistance, and cuts off all the fraudsters without needing an army of bureaucrats?
Australia tried that, and it did not go well.
https://en.wikipedia.org/wiki/Robodebt_scheme
Australia tried that, and it did not go well.
https://en.wikipedia.org/wiki/Robodebt_scheme
Eliminating all fraud for government assistance would not meaningfully change the overall budget.
Also, basically all efforts claiming to tackle fraud in government assistance are actually efforts to deny people assistance who do qualify for it.
Also, basically all efforts claiming to tackle fraud in government assistance are actually efforts to deny people assistance who do qualify for it.
Don't worry, all. They (the madmen, er, badmen) will come up with an AI-currency (like crypto) that AIs can "pay" to the govt. as taxes, and all will be hunky-dory - for them and their masters, that is.
For the rest of us - well, life is finite, anyway. So might as well make it finito.
;)
For the rest of us - well, life is finite, anyway. So might as well make it finito.
;)
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I don't get it. How does the initial anecdote about AI being shitty and sloppy tie in to the rest of the article?
> if we increasingly describe workers as merely being “human-in-the-loop,” what is the human actually there for?
Your anecdote just answered this! Because the LLM slop output in excel wasn't good enough!
> if we increasingly describe workers as merely being “human-in-the-loop,” what is the human actually there for?
Your anecdote just answered this! Because the LLM slop output in excel wasn't good enough!
Because it wasn't good enough—and for paying taxes!
It does not make sense at all - we just react very well to AI outrage slop on HN (and other platforms) which is why these articles get written so much. You just need some half-baked idea and boom! frontpage
> What can we reasonably expect the level of our economic life to be a hundred years hence? ... for the first time since his creation man will be faced with his real, his permanent problem – how to use his freedom from pressing economic cares, how to occupy the leisure ... we shall endeavour ... to make what work there is still to be done to be as widely shared as possible. Three-hour shifts or a fifteen-hour week ....
- John Maynard Keynes, 1930 [0].
Keynes was an economist whose work had an enormous impact and is still discussed and taught today. He predicted much more leisure and much less work for the future and he was wrong.
Extrapolating productivity (hours of work required to create a fixed output) into the future, it makes sense that we'll need to work a lot less to make the same stuff. The missing piece is that we end up deciding we need to make other stuff/services. We fill in our extra time making new things. We're not satisfied with what we used to have.
If AI drastically increases productivity, leading to job losses, we will just make other stuff and provide other services and fill our time with that. People will create other jobs to satisfy that demand. For reference:
1700s: 90% of US workers were farmers. early 1900s: 40%, 1970: 4%
1940s: 38% of US workers were in manufacturing/factories. 2020: ~9%
As productivity improves, we come up with other things to make or services to provide that are higher complexity or "worth more".
The products and services provided by a country are not static.
[0] https://www.marxists.org/reference/subject/economics/keynes/...
- John Maynard Keynes, 1930 [0].
Keynes was an economist whose work had an enormous impact and is still discussed and taught today. He predicted much more leisure and much less work for the future and he was wrong.
Extrapolating productivity (hours of work required to create a fixed output) into the future, it makes sense that we'll need to work a lot less to make the same stuff. The missing piece is that we end up deciding we need to make other stuff/services. We fill in our extra time making new things. We're not satisfied with what we used to have.
If AI drastically increases productivity, leading to job losses, we will just make other stuff and provide other services and fill our time with that. People will create other jobs to satisfy that demand. For reference:
1700s: 90% of US workers were farmers. early 1900s: 40%, 1970: 4%
1940s: 38% of US workers were in manufacturing/factories. 2020: ~9%
As productivity improves, we come up with other things to make or services to provide that are higher complexity or "worth more".
The products and services provided by a country are not static.
[0] https://www.marxists.org/reference/subject/economics/keynes/...
I'm going to be controversial and ask: who pays taxes in tech like they should be paid? i mean small and big corporations.
Thank you for the clarity of the article.
I'm going to be controversial and ask: who pays taxes in tech?
There is no credible model for UBI anywhere from AI. It's not going to be paid for by anyone, anywhere. Petrostates including Alaska can pay one, sort of, but they are not replacing people with automation, and their largesse won't last forever.
The model of capitalism is to pay for labor and avoid taxes and fees at almost all costs. AI-enabled businesses will not seek to contribute any more to UBI than they seek to contribute to any other non-employee. People who don't labor won't get money.
The model of capitalism is to pay for labor and avoid taxes and fees at almost all costs. AI-enabled businesses will not seek to contribute any more to UBI than they seek to contribute to any other non-employee. People who don't labor won't get money.
LVT is AI proof. Severance taxes taking care of diminishing natural resources such as oil and the revenue can then be reinvested in the economy.
Why is it that every year we are capable of producing more, but we keep asking people to accept less?
Like how is “we can replace all workers with AI agents” not compatible with “we can extract enough wealth from the new profitability to sustain everyone at the current rate as a service(UBI)”
If we’re more productive after replacing everyone with machines then why can’t we just cover everyone’s basic(victuals/housing/basic utilities+internet) needs?
Like how is “we can replace all workers with AI agents” not compatible with “we can extract enough wealth from the new profitability to sustain everyone at the current rate as a service(UBI)”
If we’re more productive after replacing everyone with machines then why can’t we just cover everyone’s basic(victuals/housing/basic utilities+internet) needs?
We don’t ask people to accept less, quite the opposite:
https://fred.stlouisfed.org/series/A229RX0
https://fred.stlouisfed.org/series/A229RX0
Per capita is simply the total quantity divided by the total population and doesn't tell you anything about the distribution thereof.
Imagine a lord with an annual income of $100 from 10 serfs, who each pay $10 in annual rent to the lord but can sell goods at the nearby market town for an annual total of $11. The lord pays $80 for manor upkeep and luxuries to artisans etc from surrounding towns. That's $30 in disposable income, $2.73 per capita. One day the goods at the market and the artisans's fees all go up in price by 50% to $16.50 and $120 respectively. The lord then raises rent by 50% to $15. The lord now makes $150, so now his disposable income is $30 but all the serfs still have only $1.50 each of disposable income. The total of $40 and per capita of $4 went up, but the lord got most of the gains. And if the lord had the ability to raise rent more than the 50% increase to 15.50 (eg if serfs couldn't legally leave), then serfs would have no more disposable income at all while the total disposable income per capita would still increase.
Imagine a lord with an annual income of $100 from 10 serfs, who each pay $10 in annual rent to the lord but can sell goods at the nearby market town for an annual total of $11. The lord pays $80 for manor upkeep and luxuries to artisans etc from surrounding towns. That's $30 in disposable income, $2.73 per capita. One day the goods at the market and the artisans's fees all go up in price by 50% to $16.50 and $120 respectively. The lord then raises rent by 50% to $15. The lord now makes $150, so now his disposable income is $30 but all the serfs still have only $1.50 each of disposable income. The total of $40 and per capita of $4 went up, but the lord got most of the gains. And if the lord had the ability to raise rent more than the 50% increase to 15.50 (eg if serfs couldn't legally leave), then serfs would have no more disposable income at all while the total disposable income per capita would still increase.
Chart that against education and training costs(not just college, let’s include things like trade school or mechanics needing to supply their own tools) and basics like housing.
Circuses got cheaper, bread didnt
Circuses got cheaper, bread didnt
“Disposable income” is what’s left after debt repayment and essentials like food, health care, and shelter.
What did you think it meant? I can’t make sense of your reply.
What did you think it meant? I can’t make sense of your reply.
Ah, and the calculation for what is “essentials” has stayed the same all this time?
Does this capture if more people are renting and part of their expenditure on shelter each month is just spent vs a mortgage payment where the principal paid off gets you equity? I legitimately don’t know, but I know that single value graphs trying to summarize a complex situation are useless on their own and need more data to draw any conclusions from
Does this capture if more people are renting and part of their expenditure on shelter each month is just spent vs a mortgage payment where the principal paid off gets you equity? I legitimately don’t know, but I know that single value graphs trying to summarize a complex situation are useless on their own and need more data to draw any conclusions from
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Until people stand up and start setting things on fire, what else do you think is going to happen?
As JFK said, "Those who make peaceful revolution impossible will make violent revolution inevitable."
Who cares what he said? He’s not even the top billing at the Kennedy center anymore /s
I'm not sure if you're being facetious, but the answer is that the same mechanism that incentivizes all of this innovation prevents the gains from being distributed evenly. You can get fabulously wealthy if you can be an early mover in bringing important new technology to the market. But then you get to keep that wealth and you don't have to share it with anybody if you don't want to. So that's what ends up happening. There's probably a correct balance somewhere between incentivizing innovation and redistributing income and/or wealth, but then it's hard to preserve that balance because the wealth seekers always have an incentive to lobby for favorable policies, manipulate markets, etc. I do not believe that we as a society have managed to figure out the necessary institutions that could preserve such a balance on a multigenerational time scale.
I was being facetious.
The original capitalist philosophers were incredibly optimistic about how we could use the system to reduce scarcity. I agreed with that viewpoint.
If our current system is one where I put in a dollar of effort, and get 99 cents in return at best, it seems like that optimistic viewpoint no longer applies.
If that’s the case why should I continue to lend my energy to this system instead of lending it to one that gets me removed from the conversation because it’s against our current leaders desires?
The original capitalist philosophers were incredibly optimistic about how we could use the system to reduce scarcity. I agreed with that viewpoint.
If our current system is one where I put in a dollar of effort, and get 99 cents in return at best, it seems like that optimistic viewpoint no longer applies.
If that’s the case why should I continue to lend my energy to this system instead of lending it to one that gets me removed from the conversation because it’s against our current leaders desires?
just change the tax code to be progressive based on earnings per employee...
Over the long term, earnings per employee should shrink due to competition. So, a tax like this, can only be expected to generate significant income in emerging industries, where competition isn't as tight. IMO that would be bad for technological progress.
I think the core issue that needs to be curbed by the government is anti competitive practices, like Google and Meta buying out competition in infancy, as thats the kind of thing (monopoly) that keeps earnings per employee high longer term.
I think the core issue that needs to be curbed by the government is anti competitive practices, like Google and Meta buying out competition in infancy, as thats the kind of thing (monopoly) that keeps earnings per employee high longer term.
The Government can't put the genie back in the bottle. UBI won't work because economics. Taxes fund the government but what use is a government that cannot govern? What happens when AI is used as employees at all these companies? Is everyone a CEO now? Where does the value come from?
Once you peel back the onion, all you get is tears.
Once you peel back the onion, all you get is tears.
“UBI can’t work because economics.”
Where is your source? The data says otherwise.
https://www.wbur.org/onpoint/2024/08/19/universal-guaranteed...
https://www.wbur.org/onpoint/2024/08/19/universal-guaranteed...
UBI can cause recipients to survive well. Paid for by taxpayers on a very very small scale.
There is no model for funding UBI on a large scale. From what?
Look at the US tax system and tell me how UBI won't become just as convoluted.
As if we needed more incentives to suppress wages
Can you explain the mechanics of this? Fewer employees means higher tax?
The model of capitalism is to use money to build some means of production and hopefully generate more money from that.
We are arriving in a form of techno-feudalism where nobody produces anything. People with means to produce will pay the owners of AI who just own and make money through renting shit to people who cant afford building their own data centers or whatever. Its what companies like Amazon or Microsoft already do. They dont produce, they own and collect.
All of this has nothing to do with capitalism, its all about selling the big AI lie to producers so people base their products on some AI they dont own. And the cycle repeats, Amazon squeezed actual producing companies out of their money decades ago and now we will repeat this with AI.
Capitalists have means to produce, feudalists just collect and own.
We are arriving in a form of techno-feudalism where nobody produces anything. People with means to produce will pay the owners of AI who just own and make money through renting shit to people who cant afford building their own data centers or whatever. Its what companies like Amazon or Microsoft already do. They dont produce, they own and collect.
All of this has nothing to do with capitalism, its all about selling the big AI lie to producers so people base their products on some AI they dont own. And the cycle repeats, Amazon squeezed actual producing companies out of their money decades ago and now we will repeat this with AI.
Capitalists have means to produce, feudalists just collect and own.
Most businesses get their inputs from suppliers and add value to produce an output.
Even if you could afford to build your own datacenters you could not make the chips. Any realistic business will have a web of suppliers.
I think before you can diagnose "feudalism" you need to think really carefully about who has power in what parts of the value chain, and why. This will be specific to the business you are in.
I agree, it is a real problem if your suppliers are acting in a monopolistic or market distorting way.
Even if you could afford to build your own datacenters you could not make the chips. Any realistic business will have a web of suppliers.
I think before you can diagnose "feudalism" you need to think really carefully about who has power in what parts of the value chain, and why. This will be specific to the business you are in.
I agree, it is a real problem if your suppliers are acting in a monopolistic or market distorting way.
> Capitalists have means to produce, feudalists just collect and own.
I think I get your distinction, but I think reality doesn't sort itself that way. Strictly, the means to produce is the factory, the land, something tangible that effects transformation, while money is just "finance". Capitalists are owners, though, and capitalism is ownerism. "Capital" is conventionally just money.
I think I get your distinction, but I think reality doesn't sort itself that way. Strictly, the means to produce is the factory, the land, something tangible that effects transformation, while money is just "finance". Capitalists are owners, though, and capitalism is ownerism. "Capital" is conventionally just money.
Cynicism about corporate accountability, regulation, oversight and legal consequences is a much larger concern than LLMs displacing people from what David Graeber would have called shitty jobs.
When I read a post that presumes that corporations are above the law and that it's a closed issue, I get sad. We can have nice things, but we must stop supporting governments that aggressively deregulate, prioritize mergers over public good, and compel their law enforcement to focus on hunting migrants instead of forcing corporations to pay taxes.
Talking about these systemic issues as though they are unsolvable because clearly corporations gonna corporation is maddening.
I don't understand why they don't jail corporate directors who are ultimately responsible for approving creative accounting tricks. If there's no penalty, of course they aren't going to do the right thing.
The greatest trick the devil can play in this era is convincing the public that their enemy is the least powerful people in society, not the most powerful.
When I read a post that presumes that corporations are above the law and that it's a closed issue, I get sad. We can have nice things, but we must stop supporting governments that aggressively deregulate, prioritize mergers over public good, and compel their law enforcement to focus on hunting migrants instead of forcing corporations to pay taxes.
Talking about these systemic issues as though they are unsolvable because clearly corporations gonna corporation is maddening.
I don't understand why they don't jail corporate directors who are ultimately responsible for approving creative accounting tricks. If there's no penalty, of course they aren't going to do the right thing.
The greatest trick the devil can play in this era is convincing the public that their enemy is the least powerful people in society, not the most powerful.
At this point I think it's incumbent on those who defend the American system to provide evidence that their justice system is not pliable with wealth, that it is a meaningful threat to business and not simply an acceptable accounting risk.
How much do pardons go for these days? One to six million?
As Carney put it, the first and most important difference between the USA and Canada is that Canada enjoys the rule of law.
How much do pardons go for these days? One to six million?
As Carney put it, the first and most important difference between the USA and Canada is that Canada enjoys the rule of law.
In a consumer economy, people have to have the free cash to consume. Today, we call them workers. If they’re displaced, there’s going to be a hell of a lot of corporate taxes or trashed machines. I’d bet on the latter.
You are being downvoted by people who don't realize how money works. Without consumption, companies will cease to exist (rent, loans, energy). Without companies and consumption, taxes are gone and states are going bankrupt because it has still things like pensions, army or police to pay. And ultimately with whole consumption chain gone, those AGI valuation in Trillion of USD is zero, because nobody has money to afford to rent one.
It's only a matter of time until the zero-employee unicorn becomes technically possible.
The path there looks like Uber's early playbook:
* Run the company as if AI outputs are attributable corporate acts with liability clearly sitting at the corporate entity level.
* Scale faster than attribution doctrine can be practically enforced.
* Cross the "too big to fail" line. ie: become economically and operationally indispensable.
* Force doctrinal clarification, where courts recognize AI-mediated decision systems as a basis for corporate attribution, without inventing new legal persons.
The path there looks like Uber's early playbook:
* Run the company as if AI outputs are attributable corporate acts with liability clearly sitting at the corporate entity level.
* Scale faster than attribution doctrine can be practically enforced.
* Cross the "too big to fail" line. ie: become economically and operationally indispensable.
* Force doctrinal clarification, where courts recognize AI-mediated decision systems as a basis for corporate attribution, without inventing new legal persons.
As someone who was blown away when I started my own online business and underestimated what I would be responsible for with taxes I could go full libertarian and yell "TAXATION IS THEFT" from the rafters, but I'll refrain.
It was still a shock though. I thought our system / goal was to encourage individuals to pursue their dreams and be self-sufficient. If that is actually the case, then our system is broken.
Skipping the details I made enough to support myself and my wife. The government wanted around 20%-25% of that, and they do NOT like to take "I can't afford that" as an answer. Fast forward to today and with poor accounting and lack of foresight I now am working a fulltime corporate soul sucking dev job to pay back the government for the years I tried to make it work on my own.
It's the most disillusioned I've ever been with my life. I've never felt as trapped and depressed as I do right now. All because I owe the IRS a large amount of money. On the plus side we have some amazing bombers/jet fighters, and someone is getting their healthcare subsidized.
It was still a shock though. I thought our system / goal was to encourage individuals to pursue their dreams and be self-sufficient. If that is actually the case, then our system is broken.
Skipping the details I made enough to support myself and my wife. The government wanted around 20%-25% of that, and they do NOT like to take "I can't afford that" as an answer. Fast forward to today and with poor accounting and lack of foresight I now am working a fulltime corporate soul sucking dev job to pay back the government for the years I tried to make it work on my own.
It's the most disillusioned I've ever been with my life. I've never felt as trapped and depressed as I do right now. All because I owe the IRS a large amount of money. On the plus side we have some amazing bombers/jet fighters, and someone is getting their healthcare subsidized.
I stopped reading when this idiot declared that a tool that makes problems worse instead of helping is evidence of a system working as it should.
This is reasoning as cockeyed as the pigs use in Animal Farm.
This is reasoning as cockeyed as the pigs use in Animal Farm.
[deleted]
Sounds like a socialist to me
The future will unironically be communism, and that's the best of possible worlds.
I absolutely agree. If AI takes over, most of the jobs are gone. If jobs are gone, income for consumers is gone. If income for consumers is gone, companies will disappear next because customers don't have money to buy goods and in final stage states will go bankrupt because it has no income from taxes because consumers and companies are gone.
Unless... there will be nationalization of AI companies or their massive taxation.
Unless... there will be nationalization of AI companies or their massive taxation.
We are once again wildly overstating the capabilities of LLMs. They'll cause some minor economic rearrangement in the next ten years but slightly better search isn't going to cause mass unemployment any time soon. This is just propaganda from the "AI" industry to further the perception that they've created a machine god. Wake me up when ClosedAI goes bankrupt.
Since when "AI" exclusively implies LLMs only?
What do you think it implies?
for example driverless taxis, which is an application of AI that most of us really want
We could cause the same change with reasonable public transit. Maybe driverless trucks but I think we're a long ways from that still, people aren't going to accept a tanker of gasoline flying down the highway with nobody driving it
Most people living in the US maybe. For most people living in European cities driverless taxis would not change much. Maybe more congestion.
The article and the entire "AI will take all our jobs" doomer moment is idiotic. No one is losing their job to AI and no one will lose their job to AI in the long term without better jobs opening up in their place, same as every single technological innovation in history.
But humoring the author for a moment, and taking their argument to the extreme - let's say AI does take the majority of jobs, and taxes on human productivity aren't enough to sustain society anymore - so what? Isn't not having to work a good thing?
"But how will we pay for things without income taxes??" Why not the same way we did so for literally thousands of years of human history before this kind of taxation was a thing? Or the same way dozens of countries with no income tax do today? Consumption taxes, property taxes, wealth taxes, more efficient extraction and use of natural resources, trade, technological innovations.
The point is, there are plenty of ways for a society to collect revenue, reallocate wealth and balance the books. We don't have to all commit to back breaking labor for ~100% of our functional life just because this is the system most of us were born into and we don't know any better.
But humoring the author for a moment, and taking their argument to the extreme - let's say AI does take the majority of jobs, and taxes on human productivity aren't enough to sustain society anymore - so what? Isn't not having to work a good thing?
"But how will we pay for things without income taxes??" Why not the same way we did so for literally thousands of years of human history before this kind of taxation was a thing? Or the same way dozens of countries with no income tax do today? Consumption taxes, property taxes, wealth taxes, more efficient extraction and use of natural resources, trade, technological innovations.
The point is, there are plenty of ways for a society to collect revenue, reallocate wealth and balance the books. We don't have to all commit to back breaking labor for ~100% of our functional life just because this is the system most of us were born into and we don't know any better.
In those thousands of years of history, did we ever have multiple cities with populations over 10 million people? Did we have electricity demands? Were the agriculture/ food expectations the same?
Are you really trying to make the argument that if a significant chunk of the population is forced into unemployment, that's fine we'll just tax all the stuff that automated jobs away and it'll all just work out? Panic sets in if unemployment hits like 10% because of all the negative consequences it has on societal outcomes. Just assuming the government is gonna magically be able to reallocate resources it gets from taxing the automated systems that replace human work is a pretty insane thing to expect to work imo.
There are a hell of a lot of assumptions baked into your thinking that need to be explained and probably put under more scrutiny.
Take "We don't have to all commit to back breaking labor for ~100% of our functional life just because this is the system most of us were born into and we don't know any better" for example.
No we don't need to do manual labor 24/7, but what people generally do need is a purpose. Purpose here meaning something akin to meeting an expectation that they contribute to their own survival and to the benefit of society, even if abstractly. Take a look at most NEETs and I don't think you're going to find healthy thriving individuals, I think you're going to find people who are resigned to life and checked out. We didn't evolve to sit on our hands.
Are you really trying to make the argument that if a significant chunk of the population is forced into unemployment, that's fine we'll just tax all the stuff that automated jobs away and it'll all just work out? Panic sets in if unemployment hits like 10% because of all the negative consequences it has on societal outcomes. Just assuming the government is gonna magically be able to reallocate resources it gets from taxing the automated systems that replace human work is a pretty insane thing to expect to work imo.
There are a hell of a lot of assumptions baked into your thinking that need to be explained and probably put under more scrutiny.
Take "We don't have to all commit to back breaking labor for ~100% of our functional life just because this is the system most of us were born into and we don't know any better" for example.
No we don't need to do manual labor 24/7, but what people generally do need is a purpose. Purpose here meaning something akin to meeting an expectation that they contribute to their own survival and to the benefit of society, even if abstractly. Take a look at most NEETs and I don't think you're going to find healthy thriving individuals, I think you're going to find people who are resigned to life and checked out. We didn't evolve to sit on our hands.
My wife quite literally lost her job (extremely high annual review scores for ten years) explicitly due to AI.
A reorg happened and the new people said they were closing her whole department because they think Copilot can do it.
A reorg happened and the new people said they were closing her whole department because they think Copilot can do it.
Layoffs are a symptom of our shit economy and rising interest rates. Companies have been doing constant rounds of layoffs since at least 2021. The only thing that has changed in the last ~year is that leadership includes "replaced with AI" in the layoff announcement so investors reward them for their "innovation" rather than penalize them for overhiring and missing targets, and employees direct blame to some faceless machine rather than actual people who screwed them over. The work is still being passed on to existing employees like always, and the $20/mo Copilot subscription they get is being immediately ignored.
I go to various meetups and frequently meet people who have had their jobs taken by AI. Paxys is living in a privileged bubble.
Journalism and transcription/translation jobs have been hit especially hard.
Journalism and transcription/translation jobs have been hit especially hard.
So you are really going with the unreasonably optimistic take that wealth will actually be redistributed to those that don't have it? Take a look at the slums in India and other periods of history where the lower classes lived in squalor and let me know how confident you are.
That said, I do not think gen AI in its current incarnation is actually going to destroy everyone's jobs.
That said, I do not think gen AI in its current incarnation is actually going to destroy everyone's jobs.
The easiest play is for the people to own the infrastructure AI runs on, then pay for social benefits out of infrastructure rental agreements. The cloud is massively profitable, and the federal government has a real competitive advantage compared to private parties in terms of large buildouts.
Even easier if they just own the AI companies in the first place. Make them go public, and, if you're feeling especially redistributive, spend $X of public funds to purchase stock spread equally amongst americans/humans/sentient creatures.
the federal government has a real competitive advantage compared to private parties in terms of large buildouts.
Absolutely not. WWII is over.
Absolutely not. WWII is over.
It was over when we built the interstate highway system too.
ubi just doesn't make any sense. case in point is the overwhelming negative response to the laptop 4G program in NYC with the Chromebooks. virtually every comment said it makes more sense for such a thing to be means tested and it was a waste of money since most people already had internet at their house. how ironic - if that's the attitude on this forum of all places about table stakes, imagine the reaction when you give rich people thousands of dollars a year for food. ubi is DOA.
Means testing has its own issues. How do you decide what the lines are? How do you design it for people just outside those lines that keeps it fair? Who enforces it? What happens when your means change?
Figuring all this stuff has a cost, both real (now you have to hire people to screen and enforce the means testing) and emotional/political (news story about a single mother who was rejected for making $1 too much).
So when advocating for means testing please keep in mind it’s a lot easier to not have it. Yes some who don’t need it will get it, but that can be better than a ballooned cost and some who do need it being blocked or dissuaded from getting it.
Figuring all this stuff has a cost, both real (now you have to hire people to screen and enforce the means testing) and emotional/political (news story about a single mother who was rejected for making $1 too much).
So when advocating for means testing please keep in mind it’s a lot easier to not have it. Yes some who don’t need it will get it, but that can be better than a ballooned cost and some who do need it being blocked or dissuaded from getting it.
A lot of the interest groups arguing for means testing on public benefits actually don't want those things to exist at all. Adding means tests to them is a way of making them more and more inaccessible while claiming it's simply about fareness. It's a deliberate strategy.
the reality is you can't just give things to everyone. the cost is just not sustainable.
For sure. We could never have universal benefits like roads, childhood education, firefighters, etc. That would never work.
The flipside is that some corporation is getting a massive handout for a technology contract like that, and the actual utility benefit to most people is low. You could spend the same exact amount of money directly on UBI cash and be much more effective by letting people spend money on whatever they need.
What a diarrhea take, my god. How can someone just assume finance is NOT a zero sum game?
Will AI wear adidas and rent houses?
Everybody lives of the sweat of somebody else. This should be true even in California
Taxation is a response to the economy. So if the economy changes, so should taxation.
Also - if corporations succeed in becoming completely independent of labor, it will happen regardless of taxation. We shouldn't say to corporations "you must hire people or else we won't have a tax base". We should say to corporations "since you no longer require humans, we will change the way taxes are applied."
A century or more ago, they could see how rapidly productivity was increasing. It's only increasing yet faster now. Economists then predicted people would have enormous leisure time. While they have significantly more, it's not like we have abandoned work. Instead those productivity benefits go increasingly to shareholders and not labor.
So we will soon face a precipice that will disrupt the status quo. And the people will eventually triumph because collectively we are the governed.
Also - if corporations succeed in becoming completely independent of labor, it will happen regardless of taxation. We shouldn't say to corporations "you must hire people or else we won't have a tax base". We should say to corporations "since you no longer require humans, we will change the way taxes are applied."
A century or more ago, they could see how rapidly productivity was increasing. It's only increasing yet faster now. Economists then predicted people would have enormous leisure time. While they have significantly more, it's not like we have abandoned work. Instead those productivity benefits go increasingly to shareholders and not labor.
So we will soon face a precipice that will disrupt the status quo. And the people will eventually triumph because collectively we are the governed.
Corporations already pay income tax, as do the investors in those corporations. Ultimately someone gets the cash from corporate dividends and stock buy-backs. Just because productivity increases (i.e. corporations are able to generate higher profit with fewer employees) doesn't imply any need to change taxation.
> Corporations already pay income tax, as do the investors in those corporations.
Of course!
> Just because productivity increases
Yeah I guess I'm taking a leap here where robots replace human manual labor and artificial intelligence replaces intellectual labor and there's no role for human labor anymore.
What's the just thing to do in this case? In my opinion, it's not "well we should really be committed to the existing rules because it's worked out well so far." If humans exit the workforce, the way governments work should change to answer such a significant change.
Of course!
> Just because productivity increases
Yeah I guess I'm taking a leap here where robots replace human manual labor and artificial intelligence replaces intellectual labor and there's no role for human labor anymore.
What's the just thing to do in this case? In my opinion, it's not "well we should really be committed to the existing rules because it's worked out well so far." If humans exit the workforce, the way governments work should change to answer such a significant change.
> Reality: It’s not fear; it’s math. If 30% of the workforce is displaced, and the remaining 70% have to pay for the social safety net (or UBI) required to keep the displaced alive, the math breaks.
The argument being given simply avoids the question of where the economy itself is in all this. The workers pay taxes, the taxes pay for infrastructure, sure. But the workers aren't doing work (it got taken), so they aren't earning money, so what do they pay taxes on?
It's all just efficiency gains and everyone currently employed stays employed? Not a single AI company wants that. Not a single tech company wants that. Not only do they want layoffs, they're already happening. So that's not going to work out.
Which means there's less workers being paid, less taxes, less money to be spent on the economy, which means less money to pay workers, which means... the logical conclusion is "no economy at all". Taxes are the last thing to worry about then.