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I'm not sure I'm following your thought on capital gains tax. Capital Gain tax occurs when you sell an asset for more than you paid for it. AI (software) is n

by bruce511 10mo ago

I'm not sure I'm following your thought on capital gains tax. Capital Gain tax occurs when you sell an asset for more than you paid for it. AI (software) is not an asset, and I'm not sure how you'd sell it. Computers and robots are assets (although they typically depreciate not appreciate.) Either way capital gains tax is applied to the asset not the productivity of the asset. The productivity in turn is taxed as part of income tax. Perhaps I have misunderstood your point though?

lazide 10mo ago
The ownership of software absolutely is an asset. It’s Intellectual Property. What are you referring to?
- deleted 10mo ago
  [deleted]
- solumunus 10mo ago
  They’re referring to the comment that they’re replying to, which talks about capital gains tax in an entirely different context to how you referenced software ownership.
  - jameshart 10mo ago
    If a business invests in building an AI system, they now have an asset, and the value of the business reflects the fact the business owns that software asset now - if someone were to buy the business they would get the AI software and all its potential to monetize that asset in the future, so of course it has value. If its value grows beyond the value the business originally invested to acquire it, it is quite literally a capital gain. Why do you think Anthropic is worth $175-$350bn? Where did that capital value come from?
    - solumunus 10mo ago
      Yes, that’s how a software business works. The OP seemed to be talking about how we need to reform tax due to worker replacement. Everyone is talking past each other.
      - bruce511 10mo ago
        Correct, building an AI is an asset, which can then be rented to other businesses. However the thread revolves around employers replacing employees with AI. Given that the number of AI creators is minimal, and the number of companies replacing employees is large, it follows that most companies replacing employees are renting AI, they did not create it. Hence, for those companies, AI is not an asset, it is an expense. One way of taxing those companies would be to tax AI producers based on revenue, not profits. If 50% of revenue was tax, then, the costs of AI to the end-user would go up to cover that. So revenue would "double", but half would go to govt. I am not a tax lawyer though, but I expect such a scheme is so radically different to the current tax regime, that is has precisely zero chance of being implemented like this.
        solumunus 10mo ago
        > One way of taxing those companies would be to tax AI producers based on revenue, not profits. Why?
        jameshart 10mo ago
        I guess to put AI vendors on an equal footing with human intelligence vendors (ie humans). Workers are taxed on their revenue - their gross earnings - not their profits.
        bruce511 10mo ago
        If the point is to tax AI consumers then AI providers can collect that tax on behalf of the IRS. Taxing the profit of AI companies is useless since profit is a number that is easily manipulated to 0. Taxing revenue is much more direct. Prices have to go up to cover the tax. Hence the consumer oays "more" and that more is passed onto the tax man. Taxing profit is exactly why businesses pay so little tax - it's trivial to make "no profit". (For example if the IP is held in another jurisdiction with a lower tax rate, and is "licensed" by the company which wants to make no profit. )
    - IAmBroom 10mo ago
      Honestly? Marketing and investment overreaction. What is it capable of generating in real profits? Yet to be seen.
- WalterBright 10mo ago
  > The ownership of software absolutely is an asset It's a good thing we give the D compiler system away for free! You don't have to be concerned about being taxed on it.
smallmancontrov 10mo ago
If your brokerage account is large enough that most of your change-in-net-worth happens in unrealized capital gains, your tax rate is 0%. That's pathological at the best of times and in a "capital wins" scenario it's positively thermonuclear.
- JoeAltmaier 10mo ago
  Folks like to hate on capital gains tax. I think it's perceived as a rich-person deal. But homeowners, do they get taxed each year on the increase in value of their house? Almost the same thing, but not hated on the same way.
  - smallmancontrov 10mo ago
    Homeowners get taxed every year on the value of their property. Let's do that to stocks, too.
    - immibis 10mo ago
      I think both stocks and homes should be taxed on realized value. If you sell it, that realizes the value, but also if you use it as collateral, that realizes the value. If you just live in it, we could say that it realizes the amount of rent you would have paid, or that it realizes nothing.
      - smallmancontrov 10mo ago
        No, the exponential runaway of "rich people get paid for being rich in proportion to how rich they are" is the core problem and focusing on the derivative is a magic trick intended primarily to draw attention away from the core problem. The fact that an earned derivative gets heavily taxed and an unearned derivative gets lightly taxed is so stupendously wacky that the absurdity is obvious, but the integral is the core problem.
        phil21 10mo ago

lazide 10mo ago

The ownership of software absolutely is an asset. It’s Intellectual Property. What are you referring to?

deleted 10mo ago
[deleted]
solumunus 10mo ago
They’re referring to the comment that they’re replying to, which talks about capital gains tax in an entirely different context to how you referenced software ownership.
- jameshart 10mo ago
  If a business invests in building an AI system, they now have an asset, and the value of the business reflects the fact the business owns that software asset now - if someone were to buy the business they would get the AI software and all its potential to monetize that asset in the future, so of course it has value. If its value grows beyond the value the business originally invested to acquire it, it is quite literally a capital gain. Why do you think Anthropic is worth $175-$350bn? Where did that capital value come from?
  - solumunus 10mo ago
    Yes, that’s how a software business works. The OP seemed to be talking about how we need to reform tax due to worker replacement. Everyone is talking past each other.
    - bruce511 10mo ago
      Correct, building an AI is an asset, which can then be rented to other businesses. However the thread revolves around employers replacing employees with AI. Given that the number of AI creators is minimal, and the number of companies replacing employees is large, it follows that most companies replacing employees are renting AI, they did not create it. Hence, for those companies, AI is not an asset, it is an expense. One way of taxing those companies would be to tax AI producers based on revenue, not profits. If 50% of revenue was tax, then, the costs of AI to the end-user would go up to cover that. So revenue would "double", but half would go to govt. I am not a tax lawyer though, but I expect such a scheme is so radically different to the current tax regime, that is has precisely zero chance of being implemented like this.
      - solumunus 10mo ago
        > One way of taxing those companies would be to tax AI producers based on revenue, not profits. Why?
        jameshart 10mo ago
        I guess to put AI vendors on an equal footing with human intelligence vendors (ie humans). Workers are taxed on their revenue - their gross earnings - not their profits.
        bruce511 10mo ago
        If the point is to tax AI consumers then AI providers can collect that tax on behalf of the IRS. Taxing the profit of AI companies is useless since profit is a number that is easily manipulated to 0. Taxing revenue is much more direct. Prices have to go up to cover the tax. Hence the consumer oays "more" and that more is passed onto the tax man. Taxing profit is exactly why businesses pay so little tax - it's trivial to make "no profit". (For example if the IP is held in another jurisdiction with a lower tax rate, and is "licensed" by the company which wants to make no profit. )
  - IAmBroom 10mo ago
    Honestly? Marketing and investment overreaction. What is it capable of generating in real profits? Yet to be seen.
WalterBright 10mo ago
> The ownership of software absolutely is an asset It's a good thing we give the D compiler system away for free! You don't have to be concerned about being taxed on it.

smallmancontrov 10mo ago

If your brokerage account is large enough that most of your change-in-net-worth happens in unrealized capital gains, your tax rate is 0%. That's pathological at the best of times and in a "capital wins" scenario it's positively thermonuclear.

JoeAltmaier 10mo ago
Folks like to hate on capital gains tax. I think it's perceived as a rich-person deal. But homeowners, do they get taxed each year on the increase in value of their house? Almost the same thing, but not hated on the same way.
- smallmancontrov 10mo ago
  Homeowners get taxed every year on the value of their property. Let's do that to stocks, too.
  - immibis 10mo ago
    I think both stocks and homes should be taxed on realized value. If you sell it, that realizes the value, but also if you use it as collateral, that realizes the value. If you just live in it, we could say that it realizes the amount of rent you would have paid, or that it realizes nothing.
    - smallmancontrov 10mo ago
      No, the exponential runaway of "rich people get paid for being rich in proportion to how rich they are" is the core problem and focusing on the derivative is a magic trick intended primarily to draw attention away from the core problem. The fact that an earned derivative gets heavily taxed and an unearned derivative gets lightly taxed is so stupendously wacky that the absurdity is obvious, but the integral is the core problem.
      - phil21 10mo ago