If AI replaces workers, should it also pay taxes?

No, not the AI. Just the owner of means of production like AI.

The fact that capital owners successfully avoid contributing to the financing of our states and social systems is, in my view, one of the fundamental problems of our time.

Tractors largely replaced human labour in farming about a hundred years ago. Should we have started taxing tractors?

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

It feels really alien to discuss this in terms of "taxing AI", like an economic abstraction completely breaking down. Ultimately when you take automation to its logical conclusion we have people with needs and we have machines and automation capable of meeting those needs with minimal human labor.

No matter how you try to resolve this economically, it should hold that if something can be produced with minimal human labor, it shouldn't require substantial human labor to buy (in "reasonable" quantities, however you want to define and enforce that).

Without understanding the "end game" of automation (decades+ from now) it feels like we're just sleepwalking into an absurd reality where a few trillionaires own the world's fully automated food supply chain, but buying food somehow requires just as much labor as it does today.

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

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

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

Interesting how this argument is only popping now that technology is threatening white collar workers.

Automation has been shoving blue collars out of the job market for a century.

A single farmer can do with his machinery today what took a dozen of people just 50 years ago.

Manufacturing has been super automated long ago.

Even in commerce automated checkout has been replacing workers for more than a decade.

In any case such a tax is not only pointless but actively dangerous, as all it achieves is making countries without such a tax more competitive.

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

Well for starters, robots shouldn’t be tax deductible because you get a net deduction already from not paying wages, so you should pay maximum tax on their purchase price.

(Otherwise you would buy a robot.. tax deduct it, then pay less tax by not paying wages, which basically means humans would be paying tax to offset the cost of corporates buying robot to replace their own jobs which doesn’t seem fair)

Plus, they should probably add a 50% VAT or something like that on initial purchase, which covers displaced tax for at least 1-2 years and can help cover any initial teething issues or increases in social services.

I personally don’t think I can deal with living in a society where robots are so cheap that within 5 years or whatever there’s 2-3 times the human population worth of robots. Tax it all to hell, because that sounds maddening.

Food for thought: "If AI replaces workers but doesn't pay taxes, should we also stop paying taxes?"

Looking at the actual article, the people suggesting taxes on AI are American Nobel laureate Edmund Phelps, and Bill Gates, founder of MSFT. The Europeans suggest more general taxes on capital instead.

It'd be hard to tax them now since most of them are bleeding cash. I suppose you can go after Google, they make a ton of cash.

Should you pay more personal taxes because you do the job of three other people because you use better tools?

By this logic owners of wheel barrows should be taxed for all the manual labour jobs the wheel barrow destroyed.

Perhaps some sort of tax that looks at the ratio of a company's profits (or perhaps revenues) to employees, and the tax scales up if that ratio gets too high.

Arguably, a "public good" that companies provide is employment, and as they increase automation, they reduce that "public good" and direct more of their revenue to themselves rather as salary for their employees.

"In the United States, for example, about 85% of federal tax revenue comes from labor income"

That's the problem. AI has the same tax problems as corporations. But US corporate taxes are historically very low and easy to evade.

All this discussions about 'machines paying taxes' and 'basic income' is just a way of avoiding the obvious question, that is: 'who owns the means of production'?

If machines can make all the work, then, who owns the machines is the only relevant question.

The real question is if AI replaces labor, what will keep democracy in place?

People who advocate for things like UBI don't seem to realize that when voters don't have a share in the productivity of their nation, they become 100% a liability. The reason democracy persists is that the powers that be aren't incentivized to destroy democracy as it would harm them too. In 10 years that will no longer be the case. Arguably, you can already see this today as the future expectations affect the present.

Depends on whether they intend to let all of these out of work people who were unlucky enough to be born as a worker starve to death really. They are going to have to find a way to give people a life even if there are no jobs or the paperclip creation doesn't have any buyers. Anyone proposing to just leave a decent percentage of the country to just die is going to face stiff opposition.

No taxation without representation. AI Boston Tea Party follows. Leading to a new AI run nation aka Skynet...

AI can't pay taxes - but there's a fairly short list of names of people who should be paying taxes to offset the costs of AI.

About as reasonable as the time a dog was CEO of Twitter.

One of the big questions about AI is whether it will, like typical advances, create more jobs than it destroys. If it doesn’t, our problems are going to be bigger than taxes.

This question is weirdly wrapped up in how robots are perceived, and how humanoid robots are propelled by hype about replacing humans. Robots that are actual industrial capital equipment already pay property taxes. Unless of course the state or municipality has been bamboozled into giving up those property taxes for the sake of jobs that robots are eliminating. That's weird.

Gaines in efficiency is probably the number one thing that can’t be effectively taxed long term. Perhaps it could be possible to tax a specific process but even then the incentive to create loopholes would be immense, since the process is already porous those who can effectively avoid the tax make more money to invest back into making more loopholes. If we can’t stop such corruption when it is subsidizing less efficient industries that waste much of their surplus on their inherent inefficiencies how could we expect to stop it when it’s subsidizing more efficient industries.

Additionally the improvements in technology enables vertical integration at much lower scales and this means there is left surface area to tax, cheap raw goods go in, cheap refined goods come out. This already scales down to such an extent I DIY many personal projects with CNCs, and by leveraging services like Send-Cut-Send and PCBWay I can build all sorts of stuff that I otherwise would have spend 10x more on. Instead of having to earn more money that is taxed in order to purchase it I can build it as a hobby. Increasing the tax on the pipeline on purchased goods would just increase the proportion of projects that are more economical for me to make. My hobby would make money if I sold the items, but since they’re for personal use this does not get taxed.

Something unusual about the AI revolution is that the increase in productivity does not appear to be mirrored by an increase in consumption. More of what people consume is entirely digital, many people spend their lives scrolling TikTok and they do appear to be satiated. Sure there is a data center boom but I think that’s more of a mania and is going to end up over built.

The computer and internet revolutions are still slowly propagating throughout the world, there are still many technological gains to be made here and I think one of the limiters to adoption is the lack of available tech talent in the long tail. AI is different as it requires far less tech talent to use and additionally makes it easier to take advantage of the computer and internet revolutions. Not only can it propagate without the same limiting factors but it facilitates the propagation of the other revolutions at the same time.

We don't want a rebellion sparked by 'Taxation without representation'. Do we?

Nations that keep placing obstacles in the path of AI (e.g. taxes) will lose to nations that don't.

Ask yourself if this is a race you're willing to lose

The answer is, no, just tax land value.

Henry George, and David Riccardo before him, figured that as productivity and thus wealth increases the value accrues to the land owners, not capital not labor.

This is because Land is the fundamental bottleneck of human activity, the core finite resource. And as everything else gets more productive, the land itself becomes more valuable.

So, yes, tax Land, and redistribute as a dividend to all citizens. After all, no one can be credited for building that Land.

What you're asking is equivalent to asking whether capital should pay taxes.

I used to like the phrase "that idea is deeper that it first sounds", but Enron Musk ruined that for me.

We've never taxed robots for the employees they replaced in manufacturing.

Wouldn't higher productivity also lead to higher profits? Which then should be taxed accordingly?

Of course not, otherwise the rich wouldn't get richer and that would be bad for power consolidation. Everything is moving into this direction, so why should it be different with AI?

We had this discussions for years with factory machines, and nothing came out of it. Don't get me wrong, I hate having taxes for everything (living in Germany with ~65% total tax strain for me if you include everything), but this is about power and stealing other peoples work.

There could also be a moral case for dropping taxation on industrial inputs altogether, and tax solely on the outputs. That would mean zero rating the labor input. No more income tax or income related welfare tax, which this article posits will be dropping away anyway as more automation arrives. Instead, the outputs of the economy would be taxed.

Revenue would then come from the consumption of economic output via a sales tax, most likely a new, progressive tax based on your annual spending rather than a flat percentage of every sale. It could be applied on the manufacturers profits via corporation tax but taxes are for the benefit of actual people so I’d lean on the former rather than the latter. The more you rely on corporation tax the more vulnerable you are to international shenanigans.

How would you feel if your take home pay nearly doubled but you had to pay X% of your credit card bill to the taxman?

Don't the subscriptions on AI services charge VAT? Do the AI companies pay corporate taxes?

But as others pointed out, this is a silly anthromorphisation of AI - it's a tool, just like any software, nothing more. Tax the companies for sure, but don't treat LLMs like people or human-like entities. There's generations of automation tools that should be taxed as such, otherwise.

Whether it should or should not pay taxes is irrelevant.

Will it pay taxes? I think you know the answer.

"The gains in technics are never registered automatically in society: they require equally adroid inventions and adaptations in politics; and the careless habit of attributiong to mechanical improvements a direct role as instruments of culture and civilization puts a demand upon the machine to which it cannot respond."

- Lewis Mumford, Technics and Civilization

This is making it more complicated than it needs to be. You can tax things any way that funds collective expenses but doesn’t disincentivize economic activity ”too much”.

Theres nothing special or holy about income tax. If there’s no more income to tax, that burden gets shifted to corporate tax in some way. Whether it’s across the board or something more fussy like “taxing AI” is just implementation detail.

In paradise, the unemployed pay taxes for being unemployed to the owners of "AI" systems. :*

Does automation use generally pay taxes?

Should Amazon pay taxes for using factory robots in lieu of people?

Should fabric manufacturers pays taxes for using automated looms instead of hand weaving ?

Even if lawmakers wanted to tax AI, how would they do it? How do you measure the AI usage level at a company, or the number of workers it has displaced?

It seems to me that since AI is built on the collective works of the workers it's replacing any profits should probably be taxed at 100%

On the plus pole of the circuit the government prints the tokens and spends it on the things it wants done. On the minus pole it pulls the tokens via taxes. This is a means to compel the population to do work (pay taxes with tokens else jail, only way to get tokens is to do work). The idea to tax work is an economical oxymoron.

If corporations are considered "legal persons", when they break the law, should they go to jail? If a corporation was forced to shut down because of law breaking, which would be a terrible burden to the workers and the customers, would that lead to corporations becoming more responsible "persons"?

https://www.npr.org/2014/07/28/335288388/when-did-companies-...

Should AI also pay rent, mortgage, healthcare insurance, auto insurance, etc? Whatever workers make goes to rent/mortgage/insurance. A tiny percentage of workers save for retirement. Now everyone becomes a 'retiree' without monthly allowance.

Progressive tax on resource consumption, this is what a tax system for the next millennium looks like.

GNU and BSD-licensed software code has replaced a measurable amount of codes, as various companies no longer need to duplicate effort - should GNU be taxed? How?

If AI replaces workers and pays taxes, should it also vote and receive social security?

When I was young I imagined a future where nobody had to work because computers and robots could do it all.

I think ignoring AI, some Tax formula could be found that uses the number of employees in a company compared to some measure of the economical size of the company.

(With the goal of pushing the company to create jobs proportional to its scale, or pay an additional Tax equivalent to the number of employees they could've payed for)

If I were a hedge fund shorting AI, I would nod and promote the message of this article.

The Venn diagram of {people that are ok with paying taxes} and {people that will own the technology that replaces humans that pay taxes from their income} is probably going to show such a small intersection that... UBI or whatever is the flavor of the month will not be feasible.

If all goes as assumed in this thread, there will be more taxes because there will be higher profit margins at the corporate level.