Companies pay payroll taxes and employees pay income taxes. The state makes money to pay for social services.
When companies begin replacing humans with cold, dead infrastructure, that infrastructure doesn't pay taxes. Payroll and income taxes revenues are gone.
Furthermore, those humans aren't making an income with which to further stimulate the economy. They can't pay for the goods and services of other companies. No sales taxes. Consumer businesses lose revenue. Then no servicing businesses. B2B then sees second order pullback. Then those employees... The whole economy's interconnectedness and ecological food web begin to disappear if this happens.
I have no idea what the future holds for post-AI society. I tend to be much more positive in my outlook of this technology than most, but it truly could diverge from our predictions in unexpected ways.
Elon saying (paraphrasing) "everyone gets super wealthy because of AI" seems unlikely. You see how we treat homeless people. I do think we'll wind up on median/average wealthier and with less work, but that's not a given.
The really dark view is that we'll have massive concentration camps and human genocide for poor people (read: us) or all humans (if ASI happens), but that seems even more fantastically fictional.
We should start thinking about taxes and employment now, though.
Yes, but the idea of demand for a given type of labor falling due to automation isn't a new one and it's not clear what this "AI employee" framing gives us over thinking of it in those terms.
