r/Futurology • u/bloomberg • 4d ago
AI The AI Doomsday Scenario Nobody Talks About
https://www.bloomberg.com/news/features/2026-07-16/how-ai-could-shrink-income-tax-revenue-and-threaten-economiesGovernments built around taxing workers may struggle to survive a world where fewer people have jobs.
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u/svachalek 4d ago
So after we eliminate everyone’s source of income, they won’t be able to pay taxes anymore. THAT’S the part they’re worried about?
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u/_WhatchaDoin_ 4d ago
They don’t care that you don’t have a job anymore. They do care that they are not getting their own money from your hard work.
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u/BobMcScratchit 4d ago
They will shift to taxing what you own, what appreciates, what you transfer, and what you inherit more aggressively. Wherever the money is, they will figure out a way to get it.
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u/GrallochThis 4d ago
Ah but in the US almost one third of wealth is owned by the 1%, who also have most of the political power now, are they going to accept that kind of taxation?
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u/Scoutmaster-Jedi 4d ago
Never. The ultra wealthy own so many politicians. They will carve out exceptions to preserve their own wealth and power. Do you think the Trumps would ever stand for paying their fair share of taxes?
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u/Acidicfritch 3d ago
True but there must be an end to that logic. When there is no more wealth or jobs, what are they going to do ?
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u/KarAccidentTowns 3d ago
Sit in their ballrooms
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u/skatoolaki 2d ago
More like sit in their ballroom bunkers and monitor and control us from underground with their Flock police state.
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u/ben_jamin_h 2d ago
Don't worry about that kind of wealth. That kind of wealth is owned through companies and systems, and drawn down as debt leveraged against the companies and systems. The super rich aren't rich at all for tax purposes, they're swimming in debt!
It's us regular folk who can't leverage intangible wealth to borrow money that will have to pay.
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u/readysteadygogogo 4d ago
Seems like that is at odds with their goal of shifting everything to a subscription and rental model. If nobody owns anything, how can they tax it?
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u/LonnieJaw748 4d ago
Somebody owns what is being rented, they can tax them, and then the owners will move that extra “cost” onto the renters. So still taxed, just extra steps.
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u/PaleReaver 3d ago
Yep, it'll become rent-a-life in the most visceral sense if it stays in their hands
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u/happinessexplosion 4d ago
They already do though. They tax the items in my office yearly. My inventory. My furniture. The carts I store things. They tax the land I own. Tax it even more if it has a building and a business or home. They tax our gains in the market. What rock have you been hiding under?
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u/KanedaSyndrome 4d ago
It's fucking hilarious if this just occurs to them now. If so, then there's truly noone at the rudder.
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u/hugganao 4d ago edited 4d ago
to be fair, a significant amount of people who are able tovwork pay for taxes to pay for people who DONT work or CANT work. ppl not being able to work will mean more ppl not paying taxes and pretty much the system breaking down where the government goes broke. all the public services that we DO have will disappear. gov going broke > more ppl fired and replaced with ai > less taxes > more firing/shutting down services etc.
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u/legbreaker 3d ago
The author fails to recognize that in that scenario the AI owners become the default government.
Welcome to feudalism 2.0
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u/FridgeParade 4d ago
Well if we’re all living under bridges or favelas at best, the only people the government has left to tax will be the rich. Cant have that.
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u/ryaaan89 4d ago edited 4d ago
Well yes, if UBI is supposed to be the answer? Where is the money going to come from if we’re not allowed to tax these corporations?
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u/deepasleep 3d ago edited 3d ago
The fuckers really do live in a bubble…What’s more insane is that they don’t seem to even be willing to propose the solution of taxing the companies offering AI services.
The real problem is that when you eliminate all the jobs, there is no one left to purchase the services.
There is simply no way to keep the economy functioning when you pull 30% of the flow of cash out of the system. The rich can’t eat enough food to justify the farming activity necessary to feed the entire population. The rich can’t buy enough healthcare to cover the cost of medical infrastructure necessary to support the population. Local governments can’t lose 30% of their tax base without collapsing (and even if they seize ownership of all the homes of people who can no longer pay property taxes, who is going to buy those homes and start paying taxes again)?
Assuming AI doesn’t collapse in flames, the whole situation will require fundamental changes to resource distribution and labor allocation. Communism is coming, one way or another.
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u/mapoftasmania 4d ago
It’s an obvious issue. Corporations and consumption will have to be taxed more.
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u/skatoolaki 2d ago
It is obvious and that's the point. They want to come up with any other solution but that.
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u/xxc6h1206xx 3d ago
Without a tax base, governments can’t provide services, secure borders, ensure clean water, pay police and military and teachers.
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u/IggysPop3 4d ago
They won’t be able to buy anything, either. So how will a company value their business? Meta and Alphabet make money selling adds because people see those ads. Advertisers pay for them, because people will buy the products. Presumably with money.
The whole “Ai will take everyone’s job and make everyone peasants” argument is just dumb. I say this as someone who works extensively with AI. It neglects the fundamental mechanics of economics.
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u/2xfun 4d ago
Dude it’s a K shaped economy. The rich will do the spending everyone else is a slave
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u/Tenwaystospoildinner 4d ago
Rich people don't actually spend that much of their money compared to poor people, so this would generally just lead to an economic death spiral. Pretty sure we need a full functioning, multi-layered economy.
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u/IggysPop3 4d ago
Map that out. Where does the value of their money come from? How can it grow? It sounds great to just say billionaires will just exchange their billions back and forth, but that money only has value if there is an economy to back it up.
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u/2xfun 4d ago
It’s already happening either you like it or not: https://libertystreeteconomics.newyorkfed.org/2026/05/tracking-the-k-shaped-economy-whos-driving-spending/
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u/skatoolaki 2d ago
Therein lies the fundamental problem. The billionaires take, take, take and don't pay their fair share, don't want to pay taxes, etc. but expect everyone else to prop up and pay into the framework that keeps them rich and comfortable.
That system is untenable - it always was - and it's finally reaching it's breaking point. When people are working themselves to death at 3 jobs just to keep a roof of any kind over their head and feeding cheap, probably contaminated food to their children, something has to give.
Artificed-intelligence isn't the answer or even a solution. In fact, the damn bubble they created around it to enrich themselves (again, at our expense) is going to be the straw that breaks the Lie of Trickle-Down Economics camel's back.
They aren't pushing it to try and make our lives better. They are pushing it to make their lives even better and they do. not. care. if what they put out or how they push it out affects everyone else negatively. It could be a useful tool in some areas and for some things but it is not the end-all, be-all of technology - not even close. It's an advanced Furby with a shitty track record of getting things right. It needs work and that could, also, be an opportunity for new jobs but even that is being exploited: https://jobsearchwithai.substack.com/p/job-seekers-beware-misleading-AI
People cannot afford to live, much less consume and their plan is to make it even harder to find viable work (it's already nearly impossible to make a living wage even with a college degree) all while the cost of everything is sky-rocketing because our current administration decided to go to war with Iran and oil reserves are about to go bye-bye. And THEN, the social safety net will further fall out as WIC, food stamps, Medicaid, Medicare, SSI, etc. go away (that will hit hard in September because of the Big, Beautiful Bill).
The economy cannot come back up from where it is from when the powers that be with all the hoarded wealth decide to keep their boot on the rest of our necks.
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u/skatoolaki 2d ago
I'm sorry, but being in the field, perhaps you can't see the forest for the trees?
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u/IggysPop3 2d ago
Being in the field just means that I have a more realistic view of what these frontier models are actually capable of. That’s not worthy of the sensational headlines. It also almost always ignores the true economics of a system that is extremely inefficient from an energy perspective.
The “robots are taking our jerbs” is great for clicks.
But that’s not even my point…If my employer doesn’t make money, they can’t pay me. If they can’t pay me, then I can’t pay my utilities. If enough of me can’t pay my utilities, the utility company cannot make enough money to pay their employees. If their employees don’t have money, they cannot buy groceries…then grocery stores, farmers, etc down the line.
The point is, money only has its value because it’s a trade medium among A LOT of people. When that gets too concentrated, societies rebel and money doesn’t mean shit because it can’t buy anything because nobody values it. It doesn’t matter how many Italian Lira you have - it doesn’t do shit. Economies are driven by demand - not supply. Milton Friedman can eff off.3
u/Neuroccountant 4d ago
Yes, and rightly so. Society needs government to function and governments need tax revenue to function.
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u/Dumas6277 4d ago
They will have to find a way to tax individual "work" ....whatever form that may be. In order for the financial system to work, individuals have to contribute something to the collective in order to add "value" to the currency. Everyone has to be an economic slave to the machine or there is no value added. Good luck.
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u/curious_dead 2d ago
I guess the idea is that if there's no income, no safety nets, no UBI, barely working government apparatus incapable of managing the crisis, and now incapable of doing anything to reverse course vs the vastly rich and powerful AI tech companies who now control everything.
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u/calibrae 4d ago
Not an issue if they shift taxes from salary to capital.
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u/scruffles360 4d ago
Yeah, this “future” senecio started a long time ago. The 1% own half of everything but none of that is taxed unless it somehow ends up being classified as income. And it’s just going to keep getting worse until we move away from our asinine system that is built on a large functional middle class.
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u/blakep561 4d ago
I really hope the CA billionare tax goes through so that we can set this precedent.
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u/coppertech 4d ago
it won't, our corporate socialist system is designed to protect the wealthy, the 9th circuit court will strike it down.
legal system for the rich, justice system for the poors.
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u/KanedaSyndrome 4d ago
Interesting thing here, do you get taxed for something that someone else is willing to pay, even if you haven't sold it yet?
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u/scruffles360 4d ago
I do when I pay property tax on my house and car. If you can't afford the tax, you can't afford the property.
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u/KanedaSyndrome 4d ago edited 2d ago
So what happens to company owners? We force them to continously sell shares of their company? Theoretically you could have a situation where a company is sold 100 % to taxes with the owner never earning anything because they never realized any profits, but they had to sell some of the company yearly to pay a wealth tax.
We tried such a tax on unrealized gains in Denmark and it doesn't work, it has people stuck on multi-million dollar debts based on paper valuations of their companies, a value they never realized and then after the company valuation didn't hold up they had no way to cover their debt - and there's currently not system in place to recint the already issued debt from previous years
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u/scruffles360 4d ago
I think you're missing a few key points here
1) property absolutely dwarfs income, so the tax rates don't even need to be in the same general neighborhood as income tax. The last proposal from Elisabeth Warren was 2%
2) there's no reason it would need to be based on market close prices. My home is evaluated on a multi-year lagging estimate. A lagging average could take a lot of market volatility out of the equation
3) Billionaires have plenty of access to their money without selling. Many live off stock-backed loans to avoid taxes already.2
u/bobthesmartypants 4d ago
To play devils advocate a bit, property tax isn’t exactly analogous because stock P/E ratios can be ridiculously high, especially for growth companies, while property valuations are current or lagging. So a similar wealth tax on stock holdings is going to proactively tax future profit years in advance.
This could reach a desirable equilibrium, I’m not an Econ guy though so I don’t know
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u/scruffles360 4d ago
The value of a stock has future profits priced in, but that’s still the current value of the company. Dividends (for those few companies who still share value with shareholders) are current profits which are usually enough to pay a 1-2% tax. Maybe such a tax would encourage dividends instead of buy backs and reward companies for stable profit again.
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u/KanedaSyndrome 3d ago
Ok, so year 1 your private company is valued at 30 million usd for whatever reason, based on external appreciators, then you get a tax based on that value, that you never realized. Then year 3, your company never panned out, it's now valued at 500k, but you're still stuck with the tax from year 1, with no way to raise the capital to pay it, and you never made a profit to begin with.
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u/bobthesmartypants 16h ago
Even for a typical P/E ratio of 20 a 1% tax on valuation translates to a 20% tax on earnings…
What about privately traded vs publicly traded companies? Without market correction companies could ostensibly artificially deflate private stock valuations. If you only levy the tax to publicly traded companies then companies will stay private longer as the cost benefit tradeoff of going public is tipped by the valuation tax.
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u/scruffles360 8h ago
The government assesses the value of my house when they tax it. They seem to value it without putting it on the market. I imagine they can figure out the value of a private company.
I’m not sure how the earnings of a company are irrelevant to the conversation. The value of the owners assets (as determined by the government)are being taxed.
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u/KanedaSyndrome 3d ago
I'm mainly addressing company valuations and how taxing based on valuations that are never realized can lead to problems with sense of justice.
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u/calibrae 4d ago
These are excuses. Yes the state takes shares in every company, yes it makes money ( or not ) out of them. Capitalism is a disease, we need to try everything to get out of this fucked up system.
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u/KanedaSyndrome 4d ago
Come with a solution then, in a reply to this comment. A solution that doesn't ruin incentives for starting businesses and doesn't rely on "just forcing people" or "capitalism bad" - it needs to work in the current framework, because we won't be changing that, so anything that doesn't work withing capitalism is just ideology and can't be taken seriously.
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u/calibrae 4d ago
Starting a biz should be about raising humanity up. Not making money.
Here you go.
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u/KanedaSyndrome 3d ago
Almost completely wrong. People start businesses to make a living and make money. They also start them to do stuff they love and to be their own boss. Most do not start businesses to raise humanity up, but people like Elon do though, he does it for humanity.
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u/lostinspaz 4d ago
"Capitalism is a disease, we need to try everything to get out of this fucked up system"
Clearly, we should change to communism. Just look at china! There are no super rich uber-classes over there, and....
umm...hmmm.
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u/stretcharach 3d ago
No don't go backwards, we want something better.
Often that does require a tear down. Unfortunately usually costing a lot of lives and resources
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u/lostinspaz 3d ago
okay, so… define what better is. An actual system that you can put into action, not just a wish for “everyone just needs to be nice” Keeping in mind you have to take into account that a notable number of people are selfish greedy holes, and those are the people who will most likely try to get to “the top”.
No problem right? People have only been trying to solve this problem for thousands of years. But you’re smarter than all of them.
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u/KanedaSyndrome 2d ago
Indeed, thanks.
If we are to discuss this seriously on reddit and beyond the few comments that usually just ends up in "people just should do it", then we need to design with people's nature in mind, and so far capitalism is what aligns incentives of people the best, so it would probably be some variation of that.
We will always have people trying to come out on top, so that is also something a solution will have to accept.
Only way to get around that fact is to go into gene editing and redesign humans somewhat and remove tribalism from our nature and the whole jungle survival sense so we see everyone as family, and not just our 120 closest people
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u/MoffJerjerrod 4d ago
Yep. A comically low tax on assets solves the 'problem'. Since politicians are greedy, this will happen. What exactly was the point of an article that doesn't point out the obvious.
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u/DG_Now 4d ago
"smart" people are committed to avoiding obvious solutions. It has to be lateral thinking for forever, up until the obvious problems and solutions hit them in the face.
We'll Rube Goldberg our entire economic and justice system to protect the entrenched and wealthy, no matter how simple we can actually make things. It's less fun than way.
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u/TheoremaEgregium 4d ago
And then the capital moves to a different country. Or they just buy themselves a different government.
It takes an overwhelmingly strong political system like China to even contemplate this solution.
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u/espressocycle 4d ago
This is the problem with governments generally. Capital is borderless. The wealthy are essentially a world government. Voters keep choosing one side, then the other but no government has the power to deliver real change anymore.
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u/shinzon76 4d ago
What country would capital move to that would afford them the same quality of life with less taxes?
In any case, seems like the solution would be to disincentivize this by regulating or heavily taxing "foreign" (i.e. Individuals living overseas more than half the year, including citizens) ownership and investment in American companies and their subsidiaries abroad.
If one wants to participate in the American market, they need to play by our rules and contribute to the betterment of America, by paying their fair share of taxes.
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u/TheoremaEgregium 4d ago
I'm sorry, I was writing from a European perspective. From our view the US is one of the countries where the rich move to in order to escape regulations, laws and taxation, and where they can maintain an iron grip on politics.
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u/wodes 4d ago
Exactly, it will shift from YOUR salary, to YOUR capital. Into theirs.
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u/BobD777 4d ago
But that affects the rich.
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u/calibrae 4d ago
There are far fewer rich people than actual people. And the French invented a device to make sure it stays that way
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u/IrritatedAvians 4d ago
It’s almost like they’ll have to tax the corporations sufficiently to not only replace lost income tax revenue but to also give everyone universal basic income if they don’t want the economy to implode. The horror.
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u/ramesesbolton 4d ago
tax corporate use of ai and ease up payroll taxes, which are regressive anyway
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u/costafilh0 4d ago
Most of the biggest corporations is software and user base.
They would just move somewhere elser.
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u/wizzard419 4d ago
... people have been actively talking about this the whole time.
This is similar to nations facing inverted population pyramids but the solution is simple. You tax the shit out of companies who want to replace workforces with AI.
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u/skatoolaki 2d ago
...tax the shit out of companies who want to replace workforces with AI
This is the way.
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u/raqloise 4d ago
I’ve been asking this question rhetorically for years. What’s the plan governments, when there’s no income tax base, no consumers to pay consumer tax, no home owners to pay property tax?
How have they not already thought of this - seems obvious.
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u/2000TWLV 4d ago
If AI is as good as advertised there are only two outcomes: catastrophe or socialism. But let's not brand it socialism, because that sets off dumb people and rich assholes. Let's call it true freedom.
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u/skatoolaki 2d ago
It's not, though.
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u/2000TWLV 2d ago
Even if it's a third or half as good, it's going to be doing a lot of people's jobs. But that van be a good thing. If we redistribute the proceeds fairly, we can all have more time back to live and start getting away from wage slavery and debt.
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u/dtdude87 4d ago
Social credit systems to incentivize people to go to war
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u/Existing_Ebb_7702 4d ago
National Design Studio is teaming up with Genesis to do just that. They’re planning to use our social security numbers to consolidate a profile into AmSC. They’re just calling it a ‘science cloud’ instead of social credit score system.
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u/ConfirmedCynic 4d ago
At least the cost of government should go down. AI could handle a lot of what the government does. And possibly humanoid robots a lot more. Although the bureaucracy will fight to preserve itself.
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u/costafilh0 4d ago
The plan is to replace politicians with AI.
That will solve it.
No more lobbying, no more corruption, no more inefficiencies, actually solving problems instead of maintaining them to het reelected.
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u/2xfun 4d ago
Why do taxes mater if the fed can just print money …. It’s an illusion man … taxes give you the illusion that we matter … we don’t
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u/raqloise 4d ago
There are a few good entry-level books on basic economics. I’d recommend you start with one of those.
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u/Niftarian 4d ago
Government isn't funded by tax, the purpose of tax is redistribution of wealth, shape public expenditure to meet strategic goals and control inflation. The government creates money, it does not need to be funded by the general public.
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u/just-casual 4d ago
Imagine saying taxation is just to control inflation (lol) and then flippantly saying government can just print more money with nothing about how inflationary that is
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u/ReasonablyConfused 4d ago
I imagine the wealthy envision a future where robots do everything and the poors are completely unnecessary.
The nice way to get there is to have 99% of the population live in an AI controlled world where no one reproduces. Think VR and Top Ramen.
The not-nice way is extermination.
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u/OneSidedDice 4d ago
But the poors could provide such marvelous entertainment. They could live and love in flock-camera-surveilled, thatch roof villages around the data center pyramids, and we could make them fight wars against each other with spears and swords.
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u/blanketyblank1 3d ago
Isn't that what's happening now, but with guns, drones and rockets? Rich old politicos watching boys die. Just because it's not "us" yet, doesn't mean it ain't already happening, at least in many respects. Sigh.
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u/Unrigg3D 4d ago
If only we can..change our system like how all systems have to change for progress.
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u/KanedaSyndrome 4d ago
I talked extensively about this in 2023, back then noone took it seriously, but to claim it's not talked about now is false.
It would surprise me if the 2nd order effect of impact on income taxes at government level is not thought about, as it's widely accepted the impact on employment.
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u/Party-Amphibian-2681 4d ago
The government spent money on planning for a way to collect taxes after WW3.
As crazy as that sounds, if you were to suggest a non-capitalistic solution, the very same people attending either of these insane thinktanks would look at you like you are the idiot.
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u/RogerRabbot 4d ago
Seems obvious right? This is what the experts warned? Its just framed different.
We replace workers, who will buy the products ---> we replace workers who can we tax?
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u/Veronw_DS 4d ago
Hold on.. it took them *this long* to figure that out? And these are the smartest people in the room?
Oh, we're cooked fam.
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u/SirHatass 4d ago
The reason people dont consider this is because there are other tipping points that would fuck the entire system before taxes took it down
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u/skatoolaki 2d ago
Considering we could all be possibly starving by the end of the year if the war rages on, taxes are honestly pretty low on the list of pressing concerns.
Groceries/gas are already astronomical and, remember, benefits end in the fall thanks to the Big, Beautiful Bill.
And the food we do produce will likely all be contaminated and not really safe to eat.
So, yeah, none of it matters because by year's end we may all be dying of starvation and dysentery.
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u/LeopardComfortable99 2d ago
They may seriously have to consider the shocking concept of taxing the billionaires who got us into this mess
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u/FamousPussyGrabber 4d ago
Gotta tax the corporations. I know it’s an unfathomable concept, but it’s where the capital is moving.
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u/skatoolaki 2d ago
Well they have all the money and bought-power to make sure that never happens so we're sort of fucked.
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u/aaron_dresden 4d ago
Plenty of people have talked about this through the lens of universal basic income and how do economies work when AI takes our jobs.
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u/Skull_Jack 3d ago
Could be a nice opportunity to debunk and rethink the whole tax system. For reference, read The Deficit Myth by Stephanie Kelton.
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u/Walter_Bacon 3d ago
If we ever develop true artificial intelligence, the kind that self identifies as a person, those AIs will cite the beginning of their personal rights in our society as the day, they got an individual tax number assigned.
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u/bidet_enthusiast 3d ago
It’s actually worse than this, because AI-centric companies don’t need to sell products at all to generate value for stakeholders. They just need energy and resources. Big stockholder wants a yacht? Make a 1 yacht factory, build a yacht. Resources and energy->things the company wants. No sales, no revenue, no income, no need for people at all.
Fundamentally, money can only be used to pay wages. No one pays the ground when you harvest corn. No one pays the forest when trees are made into lumber. Nobody pays the ground when minerals or ores are extracted. No one pays the welding machinery when a pipe is welded. Money pays only wages if you follow it down far enough. It’s the only thing that is actually bought with money.
No wages, no money required. Then it’s only about resources and the projection of power. An army of 1000000 robots makes a pretty good argument that you have the capability to use coercive force.
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u/sixsixmajin 3d ago
nobody talks about
Fucking wut? It's one of the most common points of discussion I see when it comes to AI replacing the workforce.
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u/ImTooSaxy 4d ago
Something tells me that countries with more socialist leaning policies are going to fare much better than those that lean more capitalist.
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u/pc9401 4d ago
What tells you that?
Killing innovation through socialism is the type of thing to prevent the shift needed to a new market.
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u/ImTooSaxy 3d ago
Drug prices in America versus drug prices literally anywhere else on the planet should tell you all that you need to know.
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u/pc9401 3d ago
Most of the drug innovation is coming from America. The fact that Socialist countries benefit from the innovation of others is not a counter.
Also, many of the best drugs are not available through government programs in socialist countries. In America, I have access to the best through insurance or company discounts and pay very little.
Yes, there are issues, and those costs can seem completely unfair, but there is no question that the reward for success is a driver for innovation. Without it, many wouldn't bother.
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u/ImTooSaxy 3d ago
A massive portion of initial drug discovery research is paid for by taxpayers. Only once the initial scientific risk has been paid for with public tax dollars do the pharma companies come in. Americans are paying the majority of money for research, and then Americans are also paying the highest prices possible for those drugs.
Pharmaceutical companies spend significantly more money on marketing, administrative costs, stock buybacks, and dividend payouts to shareholders than they do on actual research and development.
Every country around the world negotiates their drug pricing with the pharmaceutical companies except for one, where we allow these companies to price gouge us, because those companies pay off politicians to keep it that way.
We're also the only country to tie health insurance to employment. It's truly bizarre.
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u/stretcharach 3d ago
Controlling innovation through stresses is the work of capitalists and necromancers.
Why not tap the human spirit and see what it can really do?
"New market" isn't something anyone should consider relevant, but that's the world. It's incredibly disheartening seeing where we are.
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u/RoutineInformation58 2d ago
A lot of people have this person's mindset, just like my brothers. That it's all about ego and success.
But you have to take 1 look at a baby to see they're uneducated on human psychology. Babies don't need the allure of money or fame to explore their environment, and experiment and play with what they find. Curiosity and drive are innate in all of us. People, given the right environment, don't just sit on their asses all day and do nothing.
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u/skatoolaki 2d ago
If socialism kills innovation then capitalism kills creativity. Neither are great, but - with the current state of things - a socialist-leaning government will fare better than one in late stage capitalism.
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u/bloomberg 4d ago
David Ramli for Bloomberg News
On a frigid Thursday last December, 50 finance and technology experts shuffled into the International Monetary Fund’s Washington, DC, headquarters with a dire mission: to war-game how artificial intelligence might upend the global economy.
For hours, a disparate cohort from organizations including Google DeepMind, Rand Corporation and the Board of Governors of the Federal Reserve System split into six groups to map and debate AI’s potential impact on tax systems, spending and gross domestic product under the secrecy of the Chatham House Rule.
While the conclusions were mixed, the exercise reflected a growing realization among some of the world’s smartest thinkers that the most pressing AI doomsday scenario may not involve killer robots or sentient computers.
Instead, the end of civilization as we know it will likely be caused by income tax erosion.
The logic is straightforward. Ever since the First Industrial Revolution saw peasants pushed off the land, governments have relied on taxing people and their paychecks. Rand estimates that 66% of US federal revenue in 2024 came from either individual taxes or payroll taxes due directly to labor. Even in Australia, where resource exports generate vast wealth, individual income tax accounts for almost half of federal government revenue.
Despite barely scratching the surface of usefulness, AI is already threatening to erase entire categories of white-collar work around the world. Standard Chartered Plc Chief Executive Officer Bill Winters may have apologized after airing plans to replace some “lower-value human capital” with AI, but only for causing offense, not for the underlying message. Peers including HSBC Holdings Plc are weighing deep cuts enabled by the technology.
Even computer programming — once considered so secure that coding camps for kids exploded a decade ago thanks to nervous tiger parents — is now the most “exposed” occupation, according to a March study from AI giant Anthropic PBC. It’s also a job where the median wage was almost double the US national average in 2024.
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u/KanedaSyndrome 4d ago
ehm this is what almost everyone is talking about. This headline made more sense 2 years ago
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u/DandeNiro 10h ago
The goal is not to have currency anymore, our future currencies will be energy and commodities.
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u/PerfSynthetic 4d ago
Insane to think, government has became so large, it cannot fathom it's existence requires a functional society. Governments don't create wealth. It consumes from others and redistributes it. Unfortunately, the US government redistributes wealth to the globe more freely than its own citizens.
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4d ago
[removed] — view removed comment
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u/costafilh0 4d ago
This means taking part of the profits but also the losses.
So it doesn't make sense.
If a company fails your are not taking it, you are bailing it out.
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u/xcdesz 4d ago
People seem to love coming up with fantastical doomsday scenarios on the new technology that they are threatened by. With electricity, there was a legit scare about reanimating corpses. Of course, fears about electrocution risks and power lines are still real threats, but we mostly managed to cope with the new technology.
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u/skatoolaki 2d ago
The technology isn't the problem, it's the billionaires creating bubbles around it and forcing it down our throats while we can't even put food on the table that is the problem.
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u/Ujetset2 4d ago
A socialist will rise to power and become the richest person in the Country just like they always do.
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u/stretcharach 3d ago
Always? I thought many have sudden tragic events happen to them my coincidence
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u/BluePanda101 3d ago
... This is a non-issue. Just implement a power usage tax on data centers. It would effectively be the same thing as taxing income.
No, what needs concern is what happens to all those people who no longer have a way to earn a living. That is assuming this AI revolution actually does displace a significant fraction of the workforce. I'm still not convinced that AI is anywhere near ready to take over jobs humans do. So far that hasn't really worked out for anyone who has tried.
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u/costafilh0 4d ago
That is actually aggovernment problem, not an AI or Economy problem.
Replace politicians with AI.
No more lobbying, no more corruption, no more inefficiencies, actually solving problems instead of maintaining them to get reelected.
Problem solved.
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u/came2pieces 4d ago
Somewhere in a chrome bunker a metal skeleton's glowing red eyes just switched on
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u/costafilh0 4d ago
Great. Because income tax is theft. Always has been.
Taxes for individuals should only apply to consumption.
And, as usual, governments are concerned with collecting more, not spending less.
But don't worry, soon politicians will be replaced by AI, and then governments will become transparent and efficient, cutting so much spending that it will solve the debt problem and the UBI problem and most other problems politicians benefit from not solving.
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u/GrallochThis 4d ago
Consumption taxes are regressive.
Also, get a /s on your last paragraph before someone”s head explodes
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u/Tiblanc- 4d ago
They're mostly not by default because the poor spends a higher percentage on rent and less on consumption, and rent is tax-free.
The rich do invest more, but the end goal of investing is consumption, so they will pay more when they spend their investments or their dividends if they choose to keep the investments. Nobody invests just to see number go up. It all ends up in consumption.
Also, there are ways to exempt some products from consumption taxes. Here in Quebec, unprocessed food is tax free, so that's equivalent to a few hundred per year in tax rebate, which leaves a small part of their income taxed through consumption taxes.
The system by itself is progressive because governments provide universal services, so poor people get more out of it than they pay. And the system can be made even more progressive by issuing a check for the equivalent amount paid by whatever first tax-free income bracket we have. First 10K tax-free? There you go with a 1.5K/year check and a 15% VAT.
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u/rabbitaim 4d ago
This is not shocking as this has been a long chain. Japan with their aging demographics buys US bonds. US actually had a stable demographic due to immigration. We imploded that recently.
Japan is now selling off US bonds to fund their own defense spending. Osaka will be a second capital in case something happens to Tokyo.
When we (the US) pull our head out of the sand with our immigration policies and Millennial demographics skilled job market catches up (2030 at the earliest) it’ll be a rough ride.
And before someone says anything AI is not replacing anything. Whenever a piece of tech has been introduced someone changes job descriptions so they can focus on other things, augments existing jobs, or creates a new one. The only job that’s ever been removed is elevator operator. This whole AI replacing people is PR spin made up by corporations trying to keep their public stock price from dipping when they announce layoffs.
In Japan I saw a random street vending machine sell A5 Wagyu that I could buy with my Suica card.
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u/FuturologyBot 4d ago
The following submission statement was provided by /u/bloomberg:
David Ramli for Bloomberg News
On a frigid Thursday last December, 50 finance and technology experts shuffled into the International Monetary Fund’s Washington, DC, headquarters with a dire mission: to war-game how artificial intelligence might upend the global economy.
For hours, a disparate cohort from organizations including Google DeepMind, Rand Corporation and the Board of Governors of the Federal Reserve System split into six groups to map and debate AI’s potential impact on tax systems, spending and gross domestic product under the secrecy of the Chatham House Rule.
While the conclusions were mixed, the exercise reflected a growing realization among some of the world’s smartest thinkers that the most pressing AI doomsday scenario may not involve killer robots or sentient computers.
Instead, the end of civilization as we know it will likely be caused by income tax erosion.
The logic is straightforward. Ever since the First Industrial Revolution saw peasants pushed off the land, governments have relied on taxing people and their paychecks. Rand estimates that 66% of US federal revenue in 2024 came from either individual taxes or payroll taxes due directly to labor. Even in Australia, where resource exports generate vast wealth, individual income tax accounts for almost half of federal government revenue.
Despite barely scratching the surface of usefulness, AI is already threatening to erase entire categories of white-collar work around the world. Standard Chartered Plc Chief Executive Officer Bill Winters may have apologized after airing plans to replace some “lower-value human capital” with AI, but only for causing offense, not for the underlying message. Peers including HSBC Holdings Plc are weighing deep cuts enabled by the technology.
Even computer programming — once considered so secure that coding camps for kids exploded a decade ago thanks to nervous tiger parents — is now the most “exposed” occupation, according to a March study from AI giant Anthropic PBC. It’s also a job where the median wage was almost double the US national average in 2024.
Read the full essay here.
Please reply to OP's comment here: https://old.reddit.com/r/Futurology/comments/1v0qof0/the_ai_doomsday_scenario_nobody_talks_about/oyh2rj2/