Artificial Intelligence: The Potential Bounty From AI Could Be $13,500 Per American Adult
That could happen in a decade, says Sam Altman, co-founder and president of AI-focused nonprofit OpenAI.
AI represents the fourth great technological revolution, says Sam Altman in a recent blog, after the agricultural, industrial and computational revolutions in the past. And it will center around our impressive ability to think, create, understand, and reason. Technology will enable “Moore’s Law for everything” – housing, education, food, clothing, etc. could become half as expensive every two years, and for decades to come. There would be so much wealth to go around that every adult in the United States could be paid $13,500 annually as soon as 10 years from now. (CNBC)
The consequences of the AI revolution
AI will cause the costs of most kinds of labor to fall to zero, thus creating phenomenal wealth. However, this turn of events must be met with a strong policy action for equitable distribution of the wealth.
Executed correctly, people’s standard of living would be dramatically improved – provided growth and inclusivity are integral components of the resulting economic system.
However, growth would need capitalism. Unfortunately, the side effect of capitalism is rising inequality.
“The best way to improve capitalism is to enable everyone to benefit from it directly as an equity owner,” observes Altman.
A new form of taxation
“We should therefore focus on taxing capital rather than labor, and we should use these taxes as an opportunity to directly distribute ownership and wealth to citizens,” he writes.
“We need technology to create more wealth, and policy to fairly distribute it.”
Altman suggests that the state should raise taxes from the two dominant founts of wealth in the new economy: 1) companies, particularly ones that make use of AI, and 2) land, which has a fixed supply.
A 2.5% tax would be imposed both on companies above a certain value, as well as private land-owners. While the taxes on land would be payable in dollars, companies would pay the tax through the issue of shares.
American Equity Fund
But here’s the twist: Both the taxes would be paid into a so-called “American Equity Fund.”
This fund would payout annual distributions, in dollars and shares, to every American above the age of 18 years.
As the economy grows, so will these payouts.
“If everyone owns a slice of American value creation, everyone will want America to do better: collective equity in innovation and in the success of the country will align our incentives,” writes Altman.
Here’s the math
Altman assumes the current valuations of US companies and private land at about $50 trillion and $30 trillion respectively. He expects these values to double over the next decade and anticipates a short-term diminution in value of 15% because of the new taxes.
The tax base would therefore be $136 trillion on which 2.5%, or $3.4 trillion, would flow to the fund annually.
Assuming 250 million eligible Americans, the average payout per head, after a decade, would be $13,500 annually.
That figure is not to be sneezed at.
“The dividend could be much higher if AI accelerates growth, but even if it’s not, $13,500 will have much greater purchasing power than it does now because technology will have greatly reduced the cost of goods and services,” Altman wrote. “And that effective purchasing power will go up dramatically every year.”
Related Story: Venture Capitalists Will Use More AI By 2025 (Gartner)
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