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Culture War Roundup for the week of April 10, 2023

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I'm sure others have seen this, but AutoGPT is here, a framework that lets instances of GPT call other instances of GPT to create complex task chains with no human input. In other words, it lets GPT instances prompt other instances to complete projects. Only about a week after being released, the examples are staggering.

This is an example of BabyAGI automating a sales prospecting pipeline, something I can say from experience normally takes a typical sales rep at least half a day to do. We can already automate it, and pretty well. This type of thing wasn't possible a week ago.

There are all sorts of other examples, and it's clear that massive automation is happening. I'm willing to bet we'll reach 30% unemployment in five years. If not sooner. The question becomes - what do we do about it?

The standard liberal answer is Universal Basic Income, and many on the left seem to think it will just magically appear once the government realizes the economic power of AGI. Problem is even if we get the buy-in from the political class, the implementation of UBI is not a simple undertaking! The funding, distribution, and potential impact on inflation alone are going to cause monstrous headaches and take years to work through. Plus even if we do have UBI, the potential of widening income inequality is insane, as those who own and control AGI technology stand to reap substantial profits, further concentrating extreme amounts wealth in their hands.

Another solution, favored by some conservatives, is to focus on retraining and upskilling the workforce. While I get the general direction here, I highly doubt a retraining program could possibly be enough to counter the rapid pace of automation. Furthermore, not everyone will have the aptitude or desire to transition into highly technical or specialized fields, which may leave a significant portion of the population without viable employment options. "Learn to code" just doesn't hit the same when software devs are going to be replaced as well.

Even if we get lucky enough to have both UBI and massive retraining, it may not be enough!

Why not get the government to throw some cash at massive infrastructure and public works projects? We could take a page out of the 1930s New Deal playbook and create a boatload of jobs in all sorts of industries. I've rarely seen anyone discuss this, but it may be necessary as it was during the Great Depression. Plus, it'd boost the economy, help repair our public infrastructure, and maybe even help tackle climate change if we invest in green tech. We could even turn this impetus towards space...

Last but not least we've got the potential impact of automation on mental health and societal well-being. We're already in the middle of a Meaning Crisis. As we increasingly rely on artificial intelligence to perform jobs and soon everyday tasks, we've got to ensure that people are still able to find purpose and meaning in their lives. This probably won't be what we've traditionally looked to, such as the arts or writing, since AI is already making that irrelevant.

Perhaps we will finally realize the importance of community in our lives and to our happiness, and start adding economic numbers and frameworks to those who create social goods. Have the government fund people to run local meetup groups, or help their neighbors with tasks, volunteer at old folks' homes, etc. It's a bit of a bludgeon solution right now, but we could refine things over time.

At the end of the day we all know the rise of AGI is going to be a shitshow for a number of reasons. I've outlined some potential solutions or stopgap measures to prevent the breakdown of society, but how does the Motte think we can navigate this change?

FairTax is still the best solution I can see to the economic disruptions of AI/ASI/AGI.

  1. It would decouple revenue from employment, tying it instead to consumers buying products/services from producers, for which all other taxes are just a proxy and collection method.

  2. It would lay the bureaucratic groundwork for UBI / Universal Flat Welfare by instituting a universal flat tax rebate with no loopholes, the FairTax Prebate. It’s calculated to refund 100% of the FairTax paid by someone at the federal poverty level, defined as someone whose subsistence costs every dollar they earn, and currently would result in about $300/mo per adult and $200/mo per child.

As AI takes over every sector of the economy, the realities of poverty would change. People would become spend-slaves, funded by government UBI to purchase from private/publicly held companies. FairTax would set up the system in the first place, automating the pipelines of money, reducing bureaucratic overhead.

How does the FairTax proposal work?

The FairTax proposal aims to replace the current income and payroll tax system in the United States with a national consumption tax. The idea behind it is that instead of taxing income, it taxes consumption, so people are taxed on what they spend, not on what they earn. This proposal is intended to simplify the tax system, increase economic growth, and promote fairness and transparency. FairTax supposedly works like:

  1. Elimination of income and payroll taxes: FairTax would eliminate all taxes on personal and corporate income, including capital gains, dividends, and payroll taxes. This means that individuals would no longer have to file income tax returns or pay taxes on the money they earned.

  2. Replacement with a national sales tax: To make up for the lost revenue due to the elimination of income and payroll tax, FairTax would implement a national sales tax, which would be levied on all new goods and services at the final point of purchase, meaning that it would apply only to retail sales (business inputs would not be taxed). The proposed tax rate is 23% on a tax-inclusive basis (this translates to approximately 30% on a tax-exclusive basis).

  3. Prebate program: To counter the regressive nature of a sales tax, FairTax includes a "prebate" system, where every household receives a monthly tax rebate based on family size. This prebate would be equal to the amount that a family living at the poverty level would pay in sales taxes. This aims to prevent low-income families from being disproportionately burdened by the sales tax and to, in effect, make the first portion of every citizen's consumption tax-free.

  4. Elimination of corporate taxes: FairTax would eliminate corporate taxes, resulting in a more competitive business environment, both domestically and internationally. This could encourage foreign investment in the United States and reduce the incentive for corporations to move their operations to countries with lower tax rates.

  5. Border adjustment: The FairTax system would impose taxes on imports but not exports, known as "border adjustment" or "destination-based taxation." This means that exported goods would be exempt from US taxes, while imported goods would be subject to the FairTax, thereby leveling the playing field for domestic producers.

  6. Simplification of the tax code: By eliminating income and payroll taxes and establishing a single sales tax, the FairTax system would simplify the tax code, potentially reducing compliance costs and tax evasion.

  7. Encouragement of savings and investment: By taxing consumption rather than income, FairTax would encourage people to save and invest more because savings and investments would no longer be subject to taxation. This could lead to higher economic growth and prosperity.

Proponents of the FairTax argue that the system would lead to increased transparency, economic growth, investment, and job creation, while reducing the power of special interest groups and eliminating loopholes in the current complex tax code. Critics contend that FairTax might disproportionately burden lower-income citizens, fail to generate sufficient tax revenue, or even unintentionally incentivize a thriving black market.

At any rate, the simplification of the US tax alone system seems worth it, regardless of the other benefits!

Isn’t this tax extremely regressive? As in the poor would be taxed a vast majority more % on their taxes than the wealthy?

Well no, because the poor effectively wouldn't get taxed (see point 3). But also, I don't really think it's a bad thing if we have a completely flat tax. It's not "regressive", it's fair. It's not a hill I would die on, but I don't think the usual arguments as to why we should tax the poor less are particularly persuasive.

But doesn't that money have to be spent at some point in order for the owner to derive benefit? It's taxed now or later. In the long run, it should be a wash.

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Depends on what gets defined as "consumption" (to be fair, our current tax scheme has no shortage of problems with what gets defined as "income"). Wikipedia gives a description and the big one that jumps out at me is investments are not taxed, which makes sense, but buying companies for control over them is something the very wealthy spend their money on, which would not be taxed at all under FairTax. Lower down the economic ladder, tuition is also excluded and is something wealthier people spend a lot more money on (both college and private school). Strangely, health care is taxed under the proposal, despite it currently often coming out of pre-tax money in our current system (at least if you have an HSA). It also applies only to personal purchases, and pretending personal purchases are business purchases is already a way people evade taxes, and would continue to be so under FairTax.

On top of that, "used" goods don't get taxed and I'm not sure exactly how much of a loophole that is. I'd expect poorer people probably buy used goods more often, not sure how that shakes out, although cars are a particular big ticket item that could mean people buying new cars would be paying a lot more tax. But I'd also be worried about games getting played with the definition of "used", just like games get played with the definition of "personal" vs. "business" purchases that are technically illegal but poorly policed.

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