Be afraid … be very afraid: AI could also revolutionize tax itself, money boffins argue
The International Monetary Fund has suggested one way to ameliorate the impact of AI: a tax on the carbon dioxide emissions created in generating masses of energy to power the computers that many hope will do some thinking for us.
The document also notes that past waves of automation have generally displaced low- and middle-skill jobs involving routine tasks, but generative AI's capabilities are more sophisticated than past automation technologies –"potentially amplifying job losses in cognitive occupations. Consequently, the labor income share in national income may further decline, exacerbating income and wealth inequality.
On the tax front, the authors suggest rethinking policies on how capital is taxed. It generally attracts lower taxes than labor, but if capital uses AI to reduce demand for labor, the tax burden needs to shift. The Fund's analysts do not, however, call for a direct tax on AI. Such a levy, they suggest, would impede uptake and see nations that adopt this approach fall behind rivals.
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