Tax on AI tokens could fill UK fiscal slump
A UK think tank has proposed an international tax on AI output that would target the tokens it produces to bridge feared gaps in government revenue. The report author, Oxford professor Ben Ansell, argues that, for a variety of reasons – mainly domestic ageing but also the structure of the economy – reform of Britain’s tax system is increasingly unavoidable. The Institute for Public Policy…
A UK think tank, the Institute for Public Policy Research (IPPR), has suggested an international tax on AI tokens to address potential fiscal shortfalls in the government. Oxford professor Ben Ansell, the report's author, asserts that various factors, primarily population aging and the economy's structure, necessitate reforms to the UK's tax system. The IPPR, which is associated with Prime Minister Andy Burnham's team, identifies the current tax system as being overly favorable towards wealth and age groups.
The proposed solution involves implementing an international token tax to capture a portion of the value generated by AI models. Given the challenges in achieving this internationally, the report also suggests domestic changes. In the short term, equalizing capital gains tax with income tax's marginal rates could help alleviate the disparity between the old and young.
Additionally, implementing a tax on speculative personal behaviors, such as gambling and crypto investing, could help compensate for revenue loss if AI starts to diminish payroll levy income.
For the proposed AI token tax to function effectively, AI companies would need to document their token production process and remit the generated revenue. International cooperation is crucial for establishing a viable AI tax regime. The IPPR's findings predict that population aging will account for nearly 80% of the additional fiscal pressure on the UK by 2075.
By then, the proportion of individuals over 65 is expected to increase from 18% in 2024 to 27%. The state pension and increased healthcare and social care expenses could result in aging contributing almost 10% of GDP to fiscal pressures by 2075.
The IPPR also proposes a valuation tax on all properties, set at a suggested rate of 0.65% of the property's value. However, this tax idea has faced opposition due to concerns over a wealth tax on homes valued at £2 million, which is set to commence next year. If the token tax proposal fails, Ansell suggests that an "AI unearned rents tax" might be required to maintain economic consumption.
Written by urgent.news from The National UAE's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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