Last week, I came across an article that spoke about how a startup company has gained some funding to continue its work into using AI as a way to crack down on tax evasion and financial crimes. And this clearly sounds like a good thing, and frankly encapsulates much of what I think AI should be used for – allowing it to go through a great deal of information faster than a human can. At the same time, though, I wonder if it is addressing the real problem.
After all, we all read stories about people or businesses who make great deals of money and pay a seeming pittance in taxes on it. So would such technology identify these anomalies and then only find that they are working within the system’s rules to legitimately reach its final tax numbers?
And sure, the answer to fixing that issue would be a massive tax overhaul that’s most likely impossible with our current political structure. It is one of those things that has become so complicated that it becomes extremely difficult to unravel. It can be easy to see one of these situations where a giant company pays little in taxes and think it is not right, but it is something else to find a solution to fix it that pleases everyone.
At the same time, however, there exists a tax gap between what the IRS expects it should collect in taxes and what it actually receives every year. So doing things that can help close that gap is a good thing. No matter what you feel a government should be spending its money on, it is easier to agree that it is difficult to budget well when you aren’t getting all expected income.
This then lands us at this interesting point we exist in now when it comes to AI. It is certainly not going to get us to a place where we are going to see clear ways to a better tax system writ large, but maybe it can help the one we are in work better. And as the AI being used gets better, receives tweaks to help it hopefully find more issues in less time, maybe evading the actual rules will become more difficult. And maybe once that happens, it will help those who decide questions about the tax system gain some more clarity about how it works.
Or maybe that’s an optimistic pipedream. At least this seems an innovative way to use a new technology, though, that is getting enough money to see what it can do.
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