Whether we celebrate AI as the next great engine of economic growth or worry about its effects on labor markets, creative rights, wealth inequality, or the environment, we mustn’t overlook that...
Whether we celebrate AI as the next great engine of economic growth or worry about its effects on labor markets, creative rights, wealth inequality, or the environment, we mustn’t overlook that the public is helping finance the technology. This should be made explicit and quantified even if it proves to be wise policy and a sound investment.
What I’m scared of is, well, what else are we making? We’re an entire nation of either service workers or meaningless desk jobs and this is the first actual technology we’ve produced in a while so...
What I’m scared of is, well, what else are we making? We’re an entire nation of either service workers or meaningless desk jobs and this is the first actual technology we’ve produced in a while so like what happens if we stop propping it up? Will it die like solar panels did? Will it take the whole country with it when it does?
While I’m sure the companies are happy to get tax cuts, it’s rather odd to recharacterize a reduced expense as funding when the cash flow is in the other direction. Normally, businesses get money...
While I’m sure the companies are happy to get tax cuts, it’s rather odd to recharacterize a reduced expense as funding when the cash flow is in the other direction. Normally, businesses get money from either investors or customers and some of that money is paid in taxes.
Some exceptions: for government contractors, the government is a customer, and there are sometimes government subsidies that actually pay out.
I guess their argument here is 2nd order effects: Which isn't a new pattern. It's not uncommon for cities to bid on some kind of proposal (e.g. a football field or some Amazon warehouse), and the...
it’s rather odd to recharacterize a reduced expense as funding when the cash flow is in the other direction
I guess their argument here is 2nd order effects:
The inverse holds true as well, as every dollar of accelerated depreciation is a dollar the Treasury can’t use elsewhere in the current budget. Tax expenditures carry opportunity costs just as direct spending does, and the effect is felt in higher deficits, higher taxes elsewhere, or forgone public
investment.
Which isn't a new pattern. It's not uncommon for cities to bid on some kind of proposal (e.g. a football field or some Amazon warehouse), and the vacuum of tax revenue today ends up being passed on to the citizens. Then for various reasons the project is abandoned and companies leave before taxation kicks in in the future. This pattern is part of why the midwest in particular (where this effect devastates their economy in a sort of "WalMart effect") already had built in mistrust over data center contracts.
But sure. It would probably be more accurate to call it "incentivizing the AI boom" instead. I don't know a snappy title to describe the above effect.
You're technically right, but in the end, it's functionally equivalent. If you're giving a business a 1 million dollar grant versus a 1 million dollar tax break, it's virtually the same effect on...
You're technically right, but in the end, it's functionally equivalent.
If you're giving a business a 1 million dollar grant versus a 1 million dollar tax break, it's virtually the same effect on both sides of the deal. The business gets more money, the citizens get less.
At the end of the day, taxes are a huge cost to all businesses when factoring in the profitability of their business model. There are few businesses that can't turn a profit if they didn't have to pay taxes, so by choosing which businesses to tax and which ones you don't, government is very much putting their thumbs on the scale of the types of business they attract to their region.
So even though they're not sending them money, they're allowing the use of their resources without actually charging them for it. "Funding" in the form of services and infrastructure rather than cash.
You could consider it equivalent as long as everything else remains equal, but I think that ignores where the revenue comes from, and that conditions can change. If the business does well then...
You could consider it equivalent as long as everything else remains equal, but I think that ignores where the revenue comes from, and that conditions can change. If the business does well then they may pay more taxes (depending on a lot of accounting details), and if they stop doing well then they'll go down.
As you point out, businesses take estimated expenses into account when deciding what to do. We often rely on this effect. The whole point of a carbon tax is change profitability calculations so that businesses will change what they do.
Whether we celebrate AI as the next great engine of economic growth or worry about its effects on labor markets, creative rights, wealth inequality, or the environment, we mustn’t overlook that the public is helping finance the technology. This should be made explicit and quantified even if it proves to be wise policy and a sound investment.
What I’m scared of is, well, what else are we making? We’re an entire nation of either service workers or meaningless desk jobs and this is the first actual technology we’ve produced in a while so like what happens if we stop propping it up? Will it die like solar panels did? Will it take the whole country with it when it does?
While I’m sure the companies are happy to get tax cuts, it’s rather odd to recharacterize a reduced expense as funding when the cash flow is in the other direction. Normally, businesses get money from either investors or customers and some of that money is paid in taxes.
Some exceptions: for government contractors, the government is a customer, and there are sometimes government subsidies that actually pay out.
I guess their argument here is 2nd order effects:
Which isn't a new pattern. It's not uncommon for cities to bid on some kind of proposal (e.g. a football field or some Amazon warehouse), and the vacuum of tax revenue today ends up being passed on to the citizens. Then for various reasons the project is abandoned and companies leave before taxation kicks in in the future. This pattern is part of why the midwest in particular (where this effect devastates their economy in a sort of "WalMart effect") already had built in mistrust over data center contracts.
But sure. It would probably be more accurate to call it "incentivizing the AI boom" instead. I don't know a snappy title to describe the above effect.
You're technically right, but in the end, it's functionally equivalent.
If you're giving a business a 1 million dollar grant versus a 1 million dollar tax break, it's virtually the same effect on both sides of the deal. The business gets more money, the citizens get less.
At the end of the day, taxes are a huge cost to all businesses when factoring in the profitability of their business model. There are few businesses that can't turn a profit if they didn't have to pay taxes, so by choosing which businesses to tax and which ones you don't, government is very much putting their thumbs on the scale of the types of business they attract to their region.
So even though they're not sending them money, they're allowing the use of their resources without actually charging them for it. "Funding" in the form of services and infrastructure rather than cash.
You could consider it equivalent as long as everything else remains equal, but I think that ignores where the revenue comes from, and that conditions can change. If the business does well then they may pay more taxes (depending on a lot of accounting details), and if they stop doing well then they'll go down.
As you point out, businesses take estimated expenses into account when deciding what to do. We often rely on this effect. The whole point of a carbon tax is change profitability calculations so that businesses will change what they do.