But this means that, unless new types of jobs are created, fewer people will have productive work in the future. Which means they won’t be paying income tax!
The concern over jobs disappearing has been a constant source of anxiety since the steam engine first appeared. It has been, as it will be in the future, mostly irrelevant. While specific jobs are eliminated by technology, the total of jobs has actually increased, The worry comes from the fact that those who performed the jobs replaced were seldom qualified, either from age or lack of training, to move directly into the new jobs created.
Making people unemployed in mid-career without sufficient planning to accommodate them with the higher productivity afforded by technology is entirely political and stems from the concept that everyone must be productive in adding value to commerce or they are “takers” and dilute the collective prosperity. In a highly technical economy where AI increasingly performs work much more efficiently than humans can, the goods are still being produced but disconnected from the incomes of the workers who are also the consumers of those goods.
As the primary function of people in the economy shifts from production to consumption, we will have to abandon many of our concepts about who “deserves” to have access to those products. We will never run out of jobs that can be performed, but the need to add value and productivity to business/products will no longer exist to structure pay levels.
This means a basic restructuring of how we perceive our currency and how it is distributed. I foresee a combination of basic subsistence, plus enough extra to allow for some recreation, provided to everyone and everyone becoming an independent provider for their talents and training with pay above that dependent upon the demand for those in the economy/society. Much of this, once necessities and education are provided free or assured with federally funded guaranteed jobs, will be in the arts and quality of life, now mostly relegated to struggling artists and volunteers or further burdening local governments that depend upon taxation for funding.
The most important job in our society, parenting, is now equivalent to forced labor in its economic impact. Negative taxation, such as earned income credit and personal deductions, meant to address this have been totally inadequate, as has any support from the public sector to enable its success. There are considerable benefits to paying people for doing this vital work and giving bonuses for success (grades, the conduct of children, etc) as well as for added difficulty (children with disabilities).
Taxes have never been a source of funding for our government beyond creating “policy space” to spend when we did the gold standard nonsense. They now only serve to control inflation and create a demand for the currency in the private sector to allow the government to provision itself on demand. Since spending must precede collecting (or borrowing) it is more accurate to say that spending funds taxes and borrowing than the other way around. One cannot collect or borrow what doesn’t yet exist.
Taxation for revenue for the monopoly issuer of the currency that neither needs nor uses revenue is now an obsolete concept. The sooner the politicians realize this and that any misery that can be mitigated with federal spending is entirely a political decision, not economic, the sooner we can stop the degradation of our nation’s economy and ramp down the dangerous level of anger that forced austerity has produced to service mostly meaningless numbers.
