Alaska gets a huge portion of its revenue from taxes on extracting oil and gas. This is a model that any state could apply to data centers extracting compute from local resources. And if demand for compute is actually heading up the Kardashev scale, it could eventually fund the whole state and subsidize resident incomes. It would act as a hedge against possible disruptions by AI.
Land Value Tax does this with effectively zero enforcement complexity and across all forms of communal wealth creation (which ultimately gets baked into land values).
Could you explain this?
I thought the idea of Land Value Tax was that the value of land gets taxed regardless of how much value is generated by use of that land. (e.g. a vacant lot is taxed the same as a lot with rental properties built on top given everything else equal.)
No it doesn't. Land tax doesn't target data centers, which usually want cheap land.
Further, when land taxes are passed down, they focus of physical goods and ignores IP and contract value. This means they are more flatly distributed throughout the population.
Third, many high return activities require almost no land. A stock trader or bank might make millions with the nanowatt of natural resources needed to flip a bit in a database. A plumber might need a lot of natural resources to fix your toilet
End of the day big tech would find a friendly government to work with before paying massive data center taxes. The fossil fuel extraction taxes work because the fossil fuels are literally in the state. If you want them you gotta work with the states government. Data centers dont have nearly the same physical restrictions
The other reason fossil fuel extraction taxes work so well is because you're effectively taxing the residents of other states. The people who bear the impact of the taxes don't get to vote on the taxes.
"Datacenters" is needlessly narrow -- as capital eats the world, we need to tax capital. Simple as.
We already tax houses, and by comparison stocks are more liquid than a firehose and easier to value than a $2 bill. There is no excuse.
As I have grown my small business, I have come to an appreciation for how comically lopsided the tax code is to push all of the taxes out of the invest/return economy and into the work/consume economy. It's really quite something. Anything to avoid the right side of the Kuznets Curve!
They compare it to a robotic arm, but they are a natural combination. Two arms, even, floating above it all, could scratch the dog, make breakfast, and maybe someday, fold a fitted sheet.
> Since Tandy was a private company, his death would have forced a liquidation of the company in order to pay the inheritance taxes.
So much value is destroyed by this form of taxation. It's inherent in having to liquidate much wealth in a short period of time. There should be a way to match the time scales better, as opposed to forcing a company to go public. Like putting non-voting shares into escrow and allowing them to be sold over years or decades.
This would come with the loss of taxes as businesses go under, but at least some offsetting increase from successful businesses that are allowed to continue operating.
There are so many mature and overly effective modern means to preserve wealth. Modern trusts, LLCs, corporations ad nauseum. It is embarrassing to make such a claim "(s)o much value is destroyed by this form of taxation" in 2026; So much concentrated and localized value was potentially diverted back then under such specialized and naive conditions, which is far from common now. And to the point, it merely could have happened and actually did not.
Exactly. It's hard to read a sob story about some private company getting liquidated to pay taxes when the far more common abuse of inheritance tax laws is the asset step up basis on death. We should narrow down considerably the amount of assets eligible for that treatment. As it is we just perpetuate ever increasing family dynasties having no relationship to merit.
I worry about dismantling working, productive smaller businesses (and they employment they provide) in service of preventing wealth concentration. In the US, at least, Big Wealth is really unaffected by estate taxes. Smaller businesses with less sophisticated ownership structure end up with a tax burden or being forced to liquidate.
In the US, federal estate taxes aren't a thing if you pay a few thousand to an estate lawyer to setup irrevocable trusts and whatnot. And these tactics usually work for state estate taxes too.
Plus the federal estate tax only starts at $15M for an individual and $30M for a married couple, so it has no effect on what most would consider a "small" business.
Most people on this forum would be served well (or at least their heirs) by spending a few thousand on an estate lawyer to prevent their heirs from having to waste time in probate court.
I agree that there are legal strategies to avoid estate tax. I also strenuously agree that avoiding probate with estate planing should be in the plan for anybody who has any assets.
My concern with estate taxes is, like I said, the potential destruction of functioning businesses-- just what was discussed in the article.
I know the tax code has provisions to permit an extension of up to fourteen years for payment. There's a non-tax-deductible interest expense, though. A business with low margins might not be able to absorb that expense even over a 14 year time window.
In the end I'm probably thinking too theoretically. Perhaps there are no real businesses large enough to exceed the estate tax exemption that haven't otherwise planned for succession.
I may just be getting "the feels" about theoretical jobs being destroyed in service of taxation.
re: small business
In my mind, at least, a business w/ a $30 million capitalization is a small business. Where I am (rural Ohio) a decently-sized family farming operation could hit that $30M cap (with land prices being what they are now). That's between 1,500 and 2,000 acres of farmland at market price. That doesn't take into account potentially inflated valuations as a result of datacenter speculators. In my county we've seen a Meta datacenter project pay 10x market value for farmland (resulting in skewed property tax valuations across the entire county).
I would posit that there is likely far more value killed through inheritance of these businesses than through forced sale due to inheritance tax. I can certainly personally point to many local businesses that were inherited and run extremely poorly by the heirs due to a lack of drive. These heirs are mostly milking the value built by the prior generation until it runs dry. A forced sale due to an inheritance tax would have put these businesses into the hands of individuals who had the drive and the financial motivation to build the business rather than milk it dry. I suspect - though certainly can't validate - this is the far more common outcome than the hypothetical value destruction you suggest would come from the forced sale.
Does this even happen with that much regularity? The company would have to be valued at over $15 million to trigger federal estate taxes. I feel like if you have that big of a going concern and never got together with a lawyer to figure out inheritance, that's a bit on you.
I admittedly know very little about running a large "small" business, but my impression after decades of scare tactics (which happen to sound a lot like this comment), is that the threats (if they were legitimate to begin with) were actually some well-known, well-understood problem that no one actually wants to fix, like healthcare costs, or that some small businesses are simply very poorly run and their struggles were entirely predictable.
You are being paid by the state for doing worthless “research” (actually being a commissar toeing the party line) and cheer the expropriation of your superior countrymen.
Destruction of long-term wealth would be a feature. The inevitable consolidation of wealth in our current economic system is the root of much of the pain we're feeling in the west today.
Arguing that LLMs spontaneously evolve new capabilities outside of their training set (being able to naturally interpret weights and manipulate them to change their function) is a completely different proposition from being able to pattern-match Pac Man really fast from a pseudo-graphical representation (which is what they actually do here).
It's like ChatGPT coming up with a brand new brownie recipe that's surprisingly good vs. coming up with a working design for a cold fusion reactor.
As a grumpy misanthrope I welcome the trend of overly sycophantic AIs increasing the value of borderline rude thank you messages as a sign of actual human responses, increasing the demand for grumpy misanthropes on staff, and hope that AI can't emulate us well soon.
You cannot pull that off if you're mid, and mid is exactly what the statistical average of humanity is.
It will try though, and it will just be an asshole.
Which, funnily enough, is exactly the same failure mode as mid humans trying on that costume fall into.
New Mexico has been the lowest scoring state for academic achievement for eight years running. I had no idea when I started substitute teaching last year, but learned fast. In an algebra class for tenth graders, there were two kids ready for it out of twenty. I kept backing up to reach the LCD to start teaching from, and discovered that most of the class were not competent at addition and subtraction, let alone advanced topics like division and fractions. Yet they all get passed along with their peers.
This is the cohort that was supposed to learn this material during the covid years, but got a free pass. I think most of them will probably not catch up, and their career choices will be circumscribed by it. The overwrought covid safetyism with regard to children has untold numbers of lifelong victims.
> This is the cohort that was supposed to learn this material during the covid years, but got a free pass. I think most of them will probably not catch up, and their career choices will be circumscribed by it. The overwrought covid safetyism with regard to children has untold numbers of lifelong victims.
We are all going to be victims of this cohort. These are people who will be unable to integrate into society due to lack of basic competency skills.
Humans arrived at a capacity for social cooperation via millions of generations in which it has been a force on reproductive fitness. That created deeply rooted phenotypes like empathy, loyalty, hierarchy, and morality. Even if such concepts can be well described in a statistical model of language, there is no reason to think that they automatically become embedded in motivation. Without that, they may as well be anthropological observations by Martians.
To embed them as motivations, we can embed neural nets within a framework of genetic algorithms, in which successful cooperation is a gate to the next generation. It seems to me that this approach should be not just about creating efficient agent swarms, but should also be at the core of alignment efforts.
>"Better to just oppose all bailouts for all sectors, always."
This is exactly the line of thought that turned the Wall Street crash into the Great Depression, which we learned from and did not repeat in 2008. The answer lies somewhere in the middle.
That's the logic that led to "Let's just let Lehman fail" and precipitated the 2008 crash. At scale, markets are not zero sum and failures sink all boats.
There are no good answers here. But pointing fingers and assigning blame is for sure one of the worst ways to do the analysis.
I don't doubt that there are possible bailouts with potential net positive outcomes, just that legislatures are capable of distinguishing them with an overall net positive outcome. Or that the benefits would outweigh the moral hazard of becoming reliant on them.
I agree that there aren't any "silver bullets", but I think there are some decent pieces of regulation like, forced splits between investment banking and commercial banking, and heavy regulation of high risk markets, especially when it comes to inclusion in retirement funds etc.
Those aren't going to single-handedly solve the boom bust cycle, but they are amongst other similar policies, a bunch of levers than governments can use if they want to in order to shield the public from risks caused by financial speculation.
> At scale, markets are not zero sum and failures sink all boats.
At scale, this boats sink somewhere, not disappeared into the void. And yeas, markets are not zero sum, amount of goods may increase and may decrease, and we should let agents that decrease them fail.
Lehman failed because of the 2008 crisis; its failure did not cause or precipitate it. Even Wikipedia lays it out in the opening summary (emphasis mine):
> “A liquidity crisis spread to global institutions by mid-2007 and climaxed with the bankruptcy of Lehman Brothers in September 2008…”
Letting Lehamn fail was the right call, because it allowed the Fed to bulldoze TARP through and save the wider economy as a result. If anything, I would say the subsequent bailouts were too generous in letting the companies retain controls and returns; the government should’ve kept a permanent, partially-nationalized control of those shares and added them to a sovereign wealth fund instead of selling them back on the market. “You fucked up so bad the entire system almost failed, so clearly you cannot be trusted to self-govern” should’ve been the unambiguous messaging from the Fed.
Late to the game, but I have to call out your shameless cherry picking. That elipsis in your wikipedia quote skips: "which triggered a stock market crash and bank runs in several countries." I mean, dude...
Yes, obviously, the subprime crisis was long in the making and has deep root causes. But the bank runs of 2008 and the frozen global financial system were 100% preventable, as they were a confidence shock (not a fundamentals thing) stemming from the sudden uncertainty due to Lehman.
A little assistance from the Bush administration in 2008 would have very plausibly produced a much softer landing and required a lot fewer bailouts overall. This really isn't controversial.
"Let them fail" is almost always the worst thing to do.
Eh, no. The reality is that we are still paying for unresolved issues from 2008 crash. If anything, each time we kick the can, the worse the next iteration will be.
> reality is that we are still paying for unresolved issues from 2008 crash
Because it was a mess. Compare it with the bank failures in 2023. Shareholders wiped out, multiple collapses, yet many people have forgotten it even happened.
Growing stock volume: ~2.66B m^3
Annual volume increment: 103M m^3
Approximate number of trees: 20B
Implied average tree volume: ~0.1275 m^3
Volume of 250K trees: 250K x 0.1275 m^3 ~ 32K m^3
Time for remaining trees to grow that volume back: 32K m^3 / 103M m^3/year ~ 0.00031 years ~ 2.7 hours
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