[ExI] USA Wealth Tax Forecast
BillK
pharos at gmail.com
Sat Oct 31 21:50:35 UTC 2026
On Sat, 31 Oct 2026 at 21:06, <spike at rainier66.com> wrote:
> This is cool BillK! It gives me an idea, a possibly profitable one.
>
>
>
> I can set up a new PredictIt account, and bet exactly as Grok (or any
> other AI) suggests. Hey, set up several, see which AI is best at betting.
> Put a small amount of money into each of their accounts, 100 bucks, small
> enough that one’s bride will not complain, then have an AI betting contest,
> with me as one of the contestants.
>
> ==================================================
>
I asked DeepSeek to consider if any unexpected events, like war, mass
unemployment, etc., would change the forecast.
Not much was the answer, especially within the specified time frame.
Report below.
BillK
DeepSeek v4.1 DeepThink:
Your question identifies exactly the right kind of tail risk: the forecast
is not a static bet on legislative arithmetic, but a bet on a *political
equilibrium that a major shock could break*. I'll analyze each scenario,
but first a direct answer.
*Short answer: Yes, unexpected events could materially affect this forecast
— but the direction and magnitude depend heavily on which event, and each
is a conjunction of "shock occurs" × "shock produces a wealth tax
specifically."* The federal probability remains very high, but the state
probability is more vulnerable to an AI/AGI-driven political wave than the
current legislative snapshot suggests.
------------------------------
1. Why the baseline is stable but not shock-proof
The 97% federal / 87% state estimates were built on a structural insight:
wealth taxes face *multiple, independent bottlenecks* — the Senate
filibuster, constitutional apportionment doctrine, and the absence of any
state-level precedent. A shock can remove a bottleneck, but it must remove
*all* of them in sequence, within the 3-year window, and produce a wealth
tax rather than a *different* policy response (windfall profits tax,
income-tax surcharge, robot tax, sovereign wealth fund, etc.).
The key asymmetry: *shocks increase the salience of wealth taxation but do
not reliably increase its feasibility.* The current evidence shows exactly
this tension — AI displacement is raising calls for wealth taxes, but the
same AI boom is also generating alternative redistribution proposals
(public wealth funds, UBI, "universal basic compute") that could absorb the
political energy without producing a net-worth tax.
------------------------------
2. Scenario-by-scenario analysisA. Large war event
*Direction: Mixed, with a modest tilt toward some wealth tax but a strong
tilt toward windfall/profits taxes instead.*
-
*Fact:* Historical and contemporary evidence shows that wars create
acute fiscal stress and political demand for "fiscal fairness," which
*can* translate into higher taxes on the rich.
-
*Fact:* The actual policy instrument chosen in recent war-related fiscal
squeezes has been *windfall taxes on corporations* (banks, oil firms,
arms suppliers), not net-worth taxes. The UK's post-Ukraine energy windfall
levy is the template, and current UK debates explicitly distinguish between
"windfall tax" and "wealth tax".
-
*Inference:* A US war would almost certainly produce a *windfall profits
tax or an excess-profits tax* before it produced a wealth tax, because
those instruments are easier to administer, face fewer constitutional
challenges, and can be framed as targeting "war profiteers" rather than all
wealthy households.
-
*Speculation:* Only a *very* large, protracted war with explicit fiscal
conscription and visible billionaire war profiteering might push the
Overton window from windfall taxes to a net-worth tax. Even then, the
federal conjunctive chain (Senate, courts) remains formidable.
*Probability shift:* Federal wealth tax probability moves from ~2–3% to
perhaps *4–6%* in a major-war scenario — a real increase, but still low.
The state probability is largely unaffected, because war-driven fiscal
pressure operates at the federal level.
B. Vast unemployment due to AI
*Direction: This is the most plausible shock pathway to a wealth tax — but
it is still a conditional, multi-step chain.*
-
*Fact:* AI could displace 10–15% of labor hours over a 10–15 year
horizon, and roughly two-thirds of federal revenue comes from labor
(payroll and income taxes). This creates a *structural fiscal crisis*
for the US government that is directly tied to wealth concentration in
AI-owning firms.
<https://www.rand.org/pubs/perspectives/PEA4392-3.html?source=post_page-----3c07183dbbeb-----------------------------------------#1>
-
*Fact:* AI leaders themselves are now explicitly calling for wealth
taxes as one of several responses. OpenAI's policy blueprint proposes
"taxes on AI-driven returns and automated labor," and Sam Altman has
outlined robot taxes, public wealth funds, and automatic safety nets.
Dario Amodei has argued that billionaires should support higher taxes on AI
wealth to avoid a "bad version designed by a mob".
<https://en.interaffairs.ru/article/axios-ai-billionaires-brace-for-pitchforks/#1>
<https://www.inc.com/leila-sheridan/sam-altman-proposes-a-new-economic-system-for-the-ai-era/91327230?ref=biztoc.com>
-
*Fact:* Senator Elizabeth Warren has already called for "new taxes on
wealth and data centers" to ensure Americans share in AI gains, and
anti-billionaire politics has become an organizing principle for the
Democratic Party.
<https://en.interaffairs.ru/article/axios-ai-billionaires-brace-for-pitchforks/#1>
-
*Fact:* The RAND Corporation's 2026 policy analysis explicitly lists
"exploring a federal wealth tax" as one of six options for stabilizing
revenue in the AI age, alongside progressive corporate taxes, capital-gains
reform, and a VAT.
<https://www.rand.org/pubs/perspectives/PEA4392-3.html?source=post_page-----3c07183dbbeb-----------------------------------------#1>
*The critical caveat:* AI-driven unemployment creates a *menu* of policy
responses, not a single inevitable one. The same RAND paper lists a *federal
VAT, progressive corporate taxation, and capital-gains reform* as
alternatives. The AI boom could just as easily produce a *robot tax*
or a *sovereign
wealth fund* as a net-worth tax. Sam Altman now favors "universal basic
compute" and public wealth funds over fixed UBI payments. Elon Musk favors
"universal high income" checks from the federal government.
<https://en.interaffairs.ru/article/axios-ai-billionaires-brace-for-pitchforks/#1>
<https://basicincome.org/news/2026/07/basic-income-is-proposed-by-several-ai-leaders/>
*Inference:* A severe AI-unemployment shock *significantly raises the
salience* of wealth taxation and could shorten the political timeline. But
it also *fragments the policy coalition* across multiple alternative
mechanisms. The net effect is a meaningful but bounded increase.
*Probability shift:* In a scenario of *vast* AI unemployment by 2028, the
federal wealth tax probability might rise from ~3% to *8–12%* — a material
shift, but still far from likely, because the Senate and constitutional
bottlenecks do not disappear just because the problem is urgent. The state
probability could rise more sharply if California or Oregon voters treat it
as a referendum on AI inequality: *perhaps 87% → 75–80%* "no state wealth
tax" in that scenario.
C. Advanced superhuman AGI development
*Direction: The most radical scenario, with the widest error bars — and the
highest chance that the type of policy response is not a traditional wealth
tax at all.*
-
*Fact:* AGI discourse is already generating proposals for *universal AI
dividends, sovereign wealth funds, progressive taxation of AGI-generated
income, and new ownership models of AI-generated wealth*. The NBER's
2026 primer frames AGI taxation as an "optimal harvesting" problem and
evaluates taxes on robots, compute, and tokens — *not* net-worth taxes
on individuals.
-
*Fact:* The political economy of AGI may favor *state ownership stakes*
or *public wealth funds* over conventional wealth taxation, because the
concentration of AI-generated wealth may be so extreme that a 2–3% annual
net-worth tax is seen as inadequate or administratively obsolete.
<https://basicincome.org/news/2026/07/basic-income-is-proposed-by-several-ai-leaders/>
-
*Speculation:* A genuine AGI breakthrough before 2029 would make the
entire tax-policy framework unstable. It could produce a *wealth tax* as
part of a New Deal-scale package — or it could bypass wealth taxation
entirely in favor of *direct public ownership of AI capital*, *compute-based
redistribution*, or *universal basic services* financed by
corporate/AI-specific levies.
*Probability shift:* This is the scenario where the forecast has the *widest
uncertainty*. A superhuman AGI event would make the 2029 policy landscape
almost unrecognizable. It could push the federal wealth tax probability to
*15–20%* if political will coalesces around a conventional wealth tax, or
it could push it *down* if the chosen instrument is a sovereign wealth fund
or AI-specific levy. The honest answer is that the forecast becomes
*low-confidence* in this scenario, and the 5–95% range would need to widen
dramatically.
------------------------------
3. Other shocks worth flagging
Shock Likely direction Mechanism
*Severe fiscal crisis / bond-market rout* Slightly *toward* wealth tax
(federal) Forces revenue debate; but wealth tax competes with VAT, spending
cuts, and income-tax reform
*Major pandemic or natural catastrophe* Neutral to slightly *toward* Emergency
spending creates fiscal pressure, but emergency taxes tend to be
broad-based or corporate
*Constitutional amendment or Supreme Court composition change* Strongly
*toward* federal wealth tax Removes the apportionment bottleneck; this is
the single most important legal variable
*A state wealth tax passes and survives legal challenge* Strongly *toward*
state wealth tax Creates a precedent and a "laboratory of democracy"
effect; Prop 40 is the key near-term test
------------------------------
4. Updated probabilistic assessment under shock scenarios
Scenario Federal wealth tax probability (baseline ~3%) State wealth tax
probability (baseline ~13%) Confidence
*Baseline (current trajectory)* *~3%* *~13%* High (federal) / Moderate
(state)
*Large US war* *~5%* *~13–15%* Moderate
*Vast AI unemployment by 2028* *~8–12%* *~20–25%* Low–moderate
*Superhuman AGI before 2029* *15–20%* (wide range: 5–30%) *25–35%* (wide
range: 10–50%) Low
*Constitutional bottleneck removed* *~25–35%* Unchanged Moderate
*Translation to "No wealth tax" probabilities:*
-
*Federal (A):* Baseline *97%* → Large war *~95%* → Vast AI unemployment
*~88–92%* → AGI *~80–85%* (with wide uncertainty).
-
*State (B):* Baseline *87%* → Large war *~85–87%* → Vast AI unemployment
*~75–80%* → AGI *~65–75%* (with wide uncertainty).
------------------------------
5. The honest bottom line
The shocks you named are *real tail risks that increase the probability of
a wealth tax*, but they do so through a *conditional, fragmented, and
institutionally filtered* pathway. The most important insight from the
current evidence is not that AI or war *automatically* produces wealth
taxation, but that *the policy menu is expanding* — and wealth taxation is
now one option among several competing responses (windfall taxes, robot
taxes, sovereign wealth funds, public wealth funds, VAT, corporate tax
reform).
*The forecast remains robust in direction but becomes less precise in
magnitude under extreme shocks.* The federal "no wealth tax" probability is
likely to stay above 80% even in severe AI-unemployment and AGI scenarios,
because the institutional bottlenecks are deep. The state probability is
more vulnerable, especially if AI-driven inequality becomes the dominant
political frame and California or Oregon voters treat a wealth tax as the
direct response.
*The single most important update trigger remains the same: the November
2026 California Prop 40 vote.* If it passes against current polling, the
state probability shifts sharply regardless of what happens with AI or war.
If it fails, the state "no wealth tax" probability strengthens, and even an
AI-unemployment shock would need to produce a *new* state-level pathway
from scratch before 2029.
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