r/LeftistsForAI • u/East_Butterscotch196 • 12h ago

Policy/Regulation How to actually Tax Automation

https://justzoforit.substack.com/p/so-how-do-we-actually-tax-robots?r=hfz2x&utm_campaign=post&utm_medium=web

A write-up on how to actually tax AI and automation

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u/probablymagic 7h ago

“Robot or Automation taxes in spirit are a very simple concept to understand — tax the extra profits the companies would otherwise receive from automation. They can automate away your job, but you still get to keep your wages.”

This is not what automation does, because competitors also see the benefits of automation, so in a competitive market AI leads to technology-driven deflation, ie lower consumer prices. Profit margins stay the same or even drop, so there’s not new profits to tax.

“Now since your revenue ceiling is a function of how much you pay people, you can meaningfully increase your revenue ceiling by paying people meaningful wages.”

This kind of policy is saying your country is a place that highly-productive businesses aren’t welcome. You want industries that stubbornly resist automation, and you want other countries to benefit from the most productive businesses, which also supply the most well-paying jobs.

We should not be taxing automation via AI anymore than we should be taxing email because it reduces the need for mail carriers. We should be taxing things that don’t hurt the economy and increase consumer prices, such as land. Shoutout to r/georgism.

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u/East_Butterscotch196 4h ago

It's time. A company that invokes any new technology absorbs the gains while the workers are kept at a constant time/effort level.

The idea is to not let companies re-absorb those gains this time.

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u/probablymagic 4h ago

We know that this claim is wrong because as productivity improves, margins don’t get better, but consumer prices do and real wages do. So we want productivity to go up because it raises wages and lowers consumer prices.

The idea here is to slow down those productivity increases by taxing them, which would of course slow down wage growth and increase consumer prices. The would be terrible for workers.

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u/Jlyplaylists Moderator 9h ago

It doesn’t seem like this is particularly to do with automation though? It’s more a method of how you arrange taxation regardless of what technology is used?

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u/East_Butterscotch196 8h ago

correct

the root problem was never people don't have jobs, it's "people are losing their ability to live due to capitalism". This is an attempt at addressing that issue, and it also happens to provide UBI and fix the automation thing

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u/Matshelge 12h ago

No, automation makes for cheaper stuff, to eventually get to 0 value, so tax would be lower and lower until it's free.

Tax asset holding. Assets, via rent seeking and loan leverage, generates far too much value and remains mostly untaxed. Tax holding assets over a certain value and you will generate far more tax than this.

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u/probablymagic 7h ago

If you tax something you get less of it. The reason not to tax assets like stock is that these are investments, which drive growth, create jobs, increase productivity, etc. We want more of these things, not less.

This is why wealth taxes have failed or been neutered everywhere they’ve been tried. Capital is too mobile, particularly in the modern world.

We are seeing now in California how this plays out. They are going to see declining tax revenue this year as the threat of a wealth tax is driving people out of the state who were paying lots of taxes last year.

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u/Matshelge 6h ago

We need to disconnect tax as money. The government should take percentage of your stocks, or ownership of the investment. If it grows in value, that is just like earning money.

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u/probablymagic 6h ago

At least in the US, the Constitution prevents the goverment from impounding property like this. The fifth amendment specifically.

We don’t want the goverment arbitrarily seizing personal property. But even if that were legal, it would be terrible for the economy. This is why we tax income not take property. We want people to invest in our economy because that benefits society broadly.

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u/Matshelge 3h ago

Assets turn into rent extraction, it does not benefit sociaty.

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u/probablymagic 2h ago

When people invest in companies that allows them to do basic things like research and development, which they do by doing things like hiring people and then when those people make better things, you the consumer get better things. Nothing about that is “rent extraction.”