Directly taxing AI is very hard. Imagine if a company had to pay taxes for every AI agent operating in the U.S. or the E.U. As if they were regular employees. Big corporations would simply move the AI agents to countries without taxes.
It's actually trivial. AI apis are pretty streamlined by now. Just slap a tax on processed tokens and you're guaranteed to reach every AI agent out there. It already happens everywhere with sales tax for normal products. Just treat tokens as the product and create an extra tax for it.
Let's say EU and US taxes AI tokens. India doesn't, so almost all prompting done by international companies now is outsourced to India, and still not taxed.
Or do you tax AI companies and tax tokens "at source"? Then, obviously, they either lose competition with foreign (let's say Chinese) companies that do the same but are not taxed, or more likely all AI companies move out of EU and US.
You could tax the energy and subsidize it for individuals. It's the ultimate resource that all business uses. But that would mean unscrupulous countries could tax their energy less and attract AI farms. So probably you need to tax imported tokens (and other goods) as well. There could be many benefits of taxing grid energy instead of labor.
Not only that, do you tax AI that doesn’t replace humans? How can you tell? Do you tax differently depending on how many workers it replaces? How do you measure that? Do you create exemptions for non-profit or humanitarian use? How do you measure that?
I can only image the Kafkaesque tax code the government would come up with. Then it would create all sorts of weird incentives as companies attempt to minimize tax paid.
sigmoid10|2 months ago
integralid|2 months ago
Let's say EU and US taxes AI tokens. India doesn't, so almost all prompting done by international companies now is outsourced to India, and still not taxed.
Or do you tax AI companies and tax tokens "at source"? Then, obviously, they either lose competition with foreign (let's say Chinese) companies that do the same but are not taxed, or more likely all AI companies move out of EU and US.
scotty79|2 months ago
katsura|2 months ago
refurb|2 months ago
I can only image the Kafkaesque tax code the government would come up with. Then it would create all sorts of weird incentives as companies attempt to minimize tax paid.
tempfile|2 months ago
integralid|2 months ago
This is not a reason to stop taxing (i agree with most here that taxes should be higher), but to design taxes that can't be circumvented easily.