What AI does is increase the return to capital in the economy by reducing the return to labour.
No, simply no. The return to capital is defined by how much competition capital faces when trying to price its output. If there are 20 AIs out there all churning away then the return to capital through the ownership of an AI is going to be about nothing. Possibly even negative.
That, inevitably, means that taxes on capital will have to increase very significantly.
So, the Elysian Tax Policy will be to increase taxes on the returns to capital that don’t benefit from the AI which is the cause of the increases on the taxation of capital.
I think this is the first time I have addressed this issue…..I suspect this is going to be a recurring theme here in the future.
Having jumped, both feet first, into error he’s never going to rethink, is he?
This is all before he gets to grips with the proper basics here. If AI increases output then we’ve all more output to enjoy. We’re richer that is. And why all of us being richer by virtue of higher consumption means taxes must rise upon capital is not adequately explained.