In 1916, part of the federal tax code included an “oil depletion allowance” which “in American (US) tax law is an allowance claimable by anyone with an economic interest in a mineral deposit or standing timber. The principle is that the asset is a capital investment that is a wasting asset, and therefore depreciation can reasonably be offset (effectively as a capital loss) against income.” This is, in simpler terms, the ability to write off profits (in other words, they are not considered taxable income) because the asset that is generating you money (also called revenue) but is, as an asset, growing smaller and smaller.
Since your oil well will eventually run dry, you can deduct a certain amount of income that it generates, because your oil well won’t last forever. Big Oil takes and is allowed to keep 23% of their profits, as they are not taxable under the Depletion Allowance Tax law. Wouldn’t you love to keep the top 23% of your income as non-taxable? According to Mother Jones magazine, Big Oil and the petrochemical industry have shielded $470 billion from being taxed since 2014 using this tax deduction. Nice work if you can get it.
Similarly, the 1996 Communications Decency Act protects social media platforms from legal responsibility if someone is injured because of the posting of one of their contributors. Legal liability in the United States (including taxes) is quite dependent upon what kind of money you have, and how many members of congress and senators you can buy. If you want to become a major player in the U.S. economy, your first steps are to, number one, have a considerable portion of your revenue rendered untaxable, and number two, reduce or eliminate a your legal liabilities. There is nothing better than being protected from lawsuits by federal law.
The stock market is being rocked by all of the AI (Artificial Intelligence) corporations who are rapidly developing Artificial Intelligence, and it is already being applied. Artificial Intelligence can mimic a human voice, which is used to call grandparents using the mimicked voice of their grandchildren and beg that the grandparents send money right away because they are in jail and need bail money. Artificial Intelligence is already being used to steal money, and we are only at the very beginning of its application. Some of the AI developers are surprised that their technology is already being used for nefarious purposes. I’m guessing computer science classes don’t bother teaching that their technology is used for odious purposes.
Conspiracy theorists, please continue reading. According to an article in Politico online (November 13, 2023) : “An organization backed by Silicon Valley billionaires and tied to leading artificial intelligence firms is funding the salaries of more than a dozen AI fellows in key congressional offices, across federal agencies and at influential think tanks.” Social media started protecting itself from regulation and litigation in the 1990s, and Artificial Intelligence (backed by billionaires, no less) is already taking measures to ensure their immunity from both federal regulation and private lawsuits.
Artificial Intelligence is already taking measures to ensure their immunity from both federal regulation and private lawsuits.
A product still in infancy, and has barely made a dent in our economy (with the exception of the Artificial Intelligence corporations’ stock, which is soaring) A.I. has already taken measures to see that it will face very little regulation and, if history repeats itself, very little taxation as well. All of this occurring with little, if any, notice by the media, with the exception of Politico. To quote some more of the article of Politico: “The fellows funded by Open Philanthropy, which is financed primarily by billionaire Facebook co-founder and Asana CEO Dustin Moskovitz and his wife Cari Tuna, are already involved in negotiations that will shape Capitol Hill’s accelerating plans to regulate AI.”
Anyone calling this “philanthropy” doesn’t understand the meaning of the word, but then, lawyers are quite gifted when it comes to bending words to support their position. There is nothing philanthropic about an organization whose intention is to influence or eliminate regulation of an upcoming technology. Philanthropic organizations, as most of us understand them, exist to benefit the public, not to influence legislators and regulators so that their product will be held harmless when it is used to defraud or damage citizens.
First, in spite of the legal talent that set up Open Philanthropy (a preeminent oxymoron if there ever was one) this is not philanthropy, and their tax-free position should be revoked immediately. This is blatant lobbying, with its creators obfuscating their intentions. Artificial Intelligence will be shoved upon the public with as little as possible regulation, since regulation would dip into the expected profits. More profits for those who are already billionaires. If they want to influence our government, they have that right, but to disguise said influence as philanthropy is shoving their economic power and influence down the throat of the United States’ citizens.
Second, since the experts are already predicting the billions of dollars that Artificial Intelligence will generate, let’s get ahead of this game and put a tax on it. The U.S. has a huge budget deficit, and the billions of dollars that Artificial Intelligence will generate could make a significant reduction of that deficit. But none of the aforementioned will happen as long as the “philanthropists” carry legislators and regulators in their pockets like so many nickels and dimes, or, in their case, hundred dollar and U.S. Treasury bills.
The American public is, once again, being played for chumps. The U.S. is a representative democracy with a capitalist economy; the U.S. is not an aristocracy. Billionaires masking their behavior as philanthropic is just another play on the American proletariat; no pie for you, Joe Lunchbox! Not that Joe Lunchbox is the only loser here, by any means. According to Mark Zandi, chief economist for Moody’s Analytics, “The tech sector may be able to produce a lot and innovate a lot without as many people going forward. That is a lesson of AI.”
While it is clear that technology will progress, regulation and taxation of said technology has lagged appallingly behind, or perhaps the Silicon Valley billionaires have just made so many contributions that our legislators and regulators simply choose not to bite the hand that feeds them. As California State Treasurer and California State Assembly speaker Jesse M. Unruh said back in the Stone Age of 1966: “Money is the mother’s milk of politics.” Philanthropy at the expense of the proletariat is not charity, and billionaires manipulating law and regulation is not the democracy our founders envisioned.
