In the last few months, everyone on this thread will have read or heard someone saying something along the lines of “ AI will take every job” or " UBI is coming to rescue us, we won’t have to work ever again" I think it’s time we put science into the facts and think this through from an economist perspective (an European one ) and not from the perspective of a handful of American tech nerds (and billionaires) who believe they understand how national treasuries are actually run. FYI I made ChatGPT do the typing and turn my thoughts below into actual sentences (including this one).
- Modern countries run on tax payers. In the UK we all pay: Income tax, national insurance, VAT, payroll taxes . And we all should know that it is that money that funds our: -Defence -Police and security -Healthcare -Pensions -Infrastructure -Education -Welfare -Courts Now, if you wipe out most jobs with AI, who exactly is paying for all of this? UK tax receipts = 40% of GDP. The majority of that comes FROM YOU. It does NOT come from corporations. Here’s the biggest tax revenue contributors: 1.Income tax £300bn+ 2.National Insurance ~£170bn 3.VAT ~£160bn
Corporation tax ~£90–100bn Corporation tax is only about 8–10% of total tax revenue. 4% of our GDP. Is that corporation tax what’s going to fund your UBI when we stop paying £300bn in income tax, plus National Insurance and VAT? Obviously not. I know you’ll say “just increase corporate tax,” right? Well, to replace those lost revenues purely through corporation tax, you’d need to multiply corporate tax receipts roughly 4–5 times. But here’s where reality kicks in. Money/ investment /profits are all mobile. If one country such as the UK massively hikes corporate tax to plug that gap, companies don’t just sit here and accept it. They move investment. They shift profits. They build data centres somewhere else . If we tried to heavily tax every corporation that adopted AI to close the gap they left with the loss of our tax payers we’d simply end up with: -less investment from those companies (they’d go elsewhere) -less growth as a result -fewer jobs as a result -and ironically less tax AND…an obvious contradiction nobody really answers: AI is supposed to cut costs and increase output. If the answer is for governments to heavily tax corporations to replace lost worker taxes, you’re just re-adding costs again and killing the incentive. You’re undoing the savings automation created. It kind of defeats the whole point. So from an economist POV, taxes to fund UBI will simply NEVER happen. It’s an idea of as few lunatics like Elon Musk who seem to forget that capitalist billionaires don’t like funding public welfare, they go Monaco, they go to Dubai, they go anywhere where they don’t have to use their profits to fund your UBI. 2. The world isn’t just America (or the UK). Let’s zoom out to Europe. If France suddenly had 15–20% unemployment because AI wiped out jobs, that wouldn’t stay inside France. It would ripple and hit Germany. It would hit the UK. It would hit Poland. If Germany’s industrial base got hollowed out, supply chains across Europe would feel it immediately. Germany isn’t just another country, it’s the backbone of a lot of European industry. If Germany’s economy weakened badly and couldn’t fund itself properly (eg. defence), do you think France and the UK would just ignore their fiscal time bomb too and say “NOT MY PROBLEM” ? These countries are economically and strategically tied together through trade, supply chains and defence. France, Germany and the UK wouldn’t just sit there and watch each others economies get wrecked by uncontrolled AI-driven unemployment . They know the moment ones starts spiralling, they all get hit next. Do you think Poland would allow AI deployment in exchange for weakening and tanking it’s economy right in front of Russian eyes? NO! It will never happen. Here’s what will happen: if unemployment starts going sustained double digits and tax receipts fall off a cliff, governments will not “let the market decide”. They’ll step in — pause or ban AI deployments, slap on emergency regulation, restrict certain use-cases, or even temporarily ban parts of it until the labour market stabilises. They’ve already shown in COVID they can hit the big red button when they think society is at risk. Same logic applies here. No government willingly lets itself become underfunded and fiscally unstable. That’s how you get thrown out of power. When pensions get shaky, healthcare gets rationed, defence budgets shrink and unemployment explodes, voters don’t shrug. They revolt at the ballot box. And when mainstream governments lose control of the economy, populists step in promising to “restore order” or “protect workers” or “take back control”. No ruling party is going to calmly oversee its own collapse while saying “well, the market decided”. They’ll protect the tax base. They’ll protect employment levels. They’ll protect fiscal stability. Not because they’re altruistic — but because political survival depends on it. So the idea that governments will just allow mass job destruction, watch revenues collapse, weaken themselves strategically and then hope UBI funded by corporate tax magically saves everything… that’s fantasy. States protect themselves. Politicians protect their power. And when stability is threatened, intervention always follows. 3. The uncomfortable truth: Russia and China are widely seen as threats in the western world, right ? Well, when it comes to AI, they could end up being some of the biggest beneficiaries of aggressive automation. Why? Because of their heavy state ownership and strong state control over key industries, their profits don’t escape to an offshore island like ours. If AI massively increases their productivity inside state-backed or government funded firms, the gains flow back toward their government automatically. There’s no billionaire relocating from China to Dubai to avoid tax like they do here. There’s no giant shareholder base moving capital around globally quite like Western firms. There’s less reliance on personal income tax as the core pillar of the system. If AI boosts output there, the state captures a large chunk of the upside directly . That can then be redirected into defence, infrastructure, public spend, whatever the state prioritises. Meanwhile, Western economies rely heavily on wages and income tax. If wages disappear too fast, the fiscal model cracks. And once it cracks, everything else starts wobbling. That’s why this isn’t just a “tech disruption” story. It’s structural. Western governments are not going to allow uncontrolled AI deployment to hollow out their employment base while geopolitical rivals potentially strengthen theirs. Not with an active war in Europe. Not with defence budgets rising. Not with economies deeply interconnected. 4. Remember the bottom line will never change: Companies need consumers. Consumers need income. Income generates tax. Tax funds the state. Remove one pillar and the whole thing gets unstable real fast. This isn’t some movie where all jobs vanish and everything magically balances itself out. AI won’t collapse every job market at once. It’ll hit unevenly. And the first major economy that sees real fiscal strain will pull the brakes — and others will follow. No tax base = no state. No state = no stability. No stability = vulnerability. And no major European power is willingly walking into that situation. I’m open to debating all of this, even the idea of a new economic model, but I don’t find it very probable. Yes, these countries cooperate on trade and defence, but they still protect their own political interests first. Europe isn’t one unified system — it’s monarchies, prime ministers, presidents, and on its edge authoritarian regimes like Russia and Belarus. Every government answers to its own voters (or power structure), so political survival will always come before experimental economic theory. submitted by /u/Whole_Revolution_759
Originally posted by u/Whole_Revolution_759 on r/ArtificialInteligence