[smikhanov]

I need to think about this more, but the first thing that comes to my mind is not that this looks like “taxing the tool”, but that this can (ought to?) be similar to an alcohol or a fuel duty.

Nobody calls alcohol duty “micromanagement”.

For products like petrol, it’s widely known that from money paid for a liter when it’s sold, say, in the UK, more money stays in the UK’s government pocket via a complex web of taxes and duties, than profits the oil production company that supplied crude oil for that petrol.

Maybe taxing a kWh of the AI data center energy consumption should be a thing? I don’t know.

[pjc50]

> Nobody calls alcohol duty “micromanagement”.

They don't, but it really is! There's different rates for different specific gravity and different processes.

Re: petrol, I note that the UK government is trying to replace this as part of the EV transition with a milage tax, which is proving controversial and fiddly.

Energy tax is a hugely fraught political issue. The "poster child" for cheap energy is a little old lady huddled over a 1kW one bar electric heater. Energy bills are a big "fixed" cost for households. Many small businesses have been affected by energy price rises - e.g. restaurants. And yet at the other end AI represents such a huge deployment of capital expenditure that it's distorting prices for everything else - energy, RAM, and so on.

I think I'd favor a "personal allowance" model similar to income tax, where you get the first X units of energy tax free and then have to pay VAT, carbon taxes etc. on the rest of it.

[ben_w]

> I think I'd favor a "personal allowance" model similar to income tax, where you get the first X units of energy tax free and then have to pay VAT, carbon taxes etc. on the rest of it.

I can see why this is tempting, but I think there's a better way to legislate with this, especially with that poster child.

I'm a landlord of a flat. I used to live in it before I left the UK. The EPC rating is D, so despite the double glazing it's still pretty cold in winter. I am now living in a fancy new-build in Berlin which, despite being 3 times the size of that flat, can be kept warm for 10 months of the year just by body heat and waste energy from the white goods — even with higher electricity costs in Germany, it costs less to be comfortable in this building in a T-shirt all year round (even while snow is falling outside), than to be wearing fleeces and sleeping with hot water bottles and still not be completely comfortable in that flat in the UK.

A few years back there was a proposal for legislation that would increase the requirements for all rental property to be at minimum C-rated by 2030, as I understand it this was dropped and the current minimum is F or something ridiculous like that. My agent's advice is to not do anything until the legislation is actually sorted, even though I'm happy to spend whatever to upgrade the place, because until you know what the legislation demands there's always a risk of doing the wrong work beforehand, having to rip it out and put something else in.

IMO, government should push for this kind of boost, as it has with other energy-saving and insulation-boosting measures.

My first rental after graduation was a Welsh solid stone wall construction; like the example you gave, I couldn't keep warm there even with the electric bar heater a meter from me.

[blitzar]

Alcohol duty, levies on cigarettes, gambling, sugar taxes etc are considered "sin taxes" and are certainly micromanagement.

“taxing the tool” makes me think of transaction taxes, like a tobin tax https://en.wikipedia.org/wiki/Tobin_tax

[smikhanov]

Well, fuel duty is a better example then

[nextaccountic]

> Maybe taxing a kWh of the AI data center energy consumption should be a thing?

That sounds excellent. Also water usage.

Really, AI has externalities and it should pay for it.

[nairboon]

That would be a highly bureaucratic solution with significant overheads. Would everyone pay extra tax per kWh or just AI computers? Tax it on the producer or consumer side? How would you verify that a particular data center is "bad computation" and needs a different tax rate on its energy usage.

Should an AI data center from pharmaceuticals or biotech startup be taxed extra per kWh, even if the AI is purely used for medical research?

[baobun]

The issue I have with your proposal is that it discloses too much metadata to tax authorities in order to enforce compliance. They'll have an almost perfect map of the legal compute in their jurisdiction. Access to compute should be free to all and not gated by taxes.

Tax on electricity is already a thing. That can be adjusted and even be made progressive. Extra for fossils and so on.