Beyond the Bots: Using AI Tax Revenue to Tackle Early Childhood Gaps and Fertility Challenges

Artificial Intelligence (AI) is rapidly becoming ubiquitous, permeating fields such as coding, research, writing, music, art, and video creation. Its continued advancement is predicted to significantly enhance worker efficiency, and in many cases, lead to widespread job displacement. This potential for mass unemployment has even led to proposals for a Universal Basic Income (UBI).

Concurrently, declining fertility rates have emerged as a significant concern in numerous countries worldwide, from Italy and Spain to Japan and South Korea. While not as severe as in some other nations, the United States also faces a below-replacement-level fertility rate. Low fertility poses substantial long-term challenges, particularly when combined with increasing life expectancies. This demographic shift can result in an aging population with an insufficient number of young people to support it.

Adding to these demographic challenges, the United States also grapples with sky-high childcare costs and a lack of comprehensive parental leave policies which makes having children a big challenge.

It's clear that Artificial Intelligence, despite its immense capabilities, cannot replicate the fundamental human care required for child development. It cannot change diapers, breastfeed, soothe a crying child, apply bandages, burp a baby, or perform the myriad other tasks essential for nurturing young lives.

Considering these interconnected societal trends, I propose a modest yet impactful solution. As AI-related companies like Microsoft, Alphabet (Google), OpenAI, Nvidia, Palantir, Apple, Amazon, Verint Systems, SambaNova, Scale AI, Meta, Anthropic, and XAI generate millions, billions, and even trillions in revenue and stock valuations, we should implement an AI Value-Added Tax (AI VAT). The funds generated from this tax would be strategically allocated to two key areas:

* Bonuses for Early Childhood Educators: Providing financial incentives to these vital professionals would acknowledge their crucial work and help retain talent in a demanding field.

* Basic Income for Parents of Young Children: A monthly basic income of at least $1000 for parents of children under five would significantly alleviate financial burdens.

This two-pronged approach could make it more financially feasible for individuals to have children and make careers as either stay-at-home parents or early childhood educators more viable. Furthermore, it presents a tangible opportunity to support workers potentially displaced by AI, offering a policy that could make parenthood a more accessible and attractive option.

How Would an AI Value-Added Tax Work?

Unlike traditional VAT applied to goods and services, an AI VAT would necessitate a precise definition of what constitutes a "taxable AI activity" or "AI product/service." Several approaches have been considered:

* Taxing AI-generated services/products: This would be the most direct application, mirroring how VAT applies to other services. The primary challenge lies in accurately identifying the "value added" by AI within complex production chains. For example, if an AI designs a product that humans then manufacture and sell, at what stage is the AI's specific contribution taxed?

* Taxing the use of AI: This approach would involve taxing companies based on their expenditure on AI software, hardware, or cloud services. While simpler to implement, it could potentially disincentivize AI adoption.

* Taxing "robot labor" or AI displacement: Some proposals advocate taxing AI systems that displace human workers. The aim here is to compensate for lost income tax revenue and potentially fund social safety nets for displaced workers. This often sparks debate regarding whether AI should be treated as a "taxable person" or if the tax liability should fall on the AI's owner or operator.

* Taxing data used for AI training: Given AI's heavy reliance on vast datasets, some suggest taxing the collection or use of data specifically for AI development. This raises complex questions about data ownership and the fair valuation of data.

* Taxing AI-derived profits: This would involve either increasing corporate income tax rates for companies that extensively leverage AI or specifically taxing the profits directly attributable to AI technologies.