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Feb. 8th, 2025 12:33 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
shiningfractalTo develop a detailed financial model for investing in automation, taxing automation-related activities, and reinvesting the tax revenue into reskilling the population over the course of ten years, we need to follow a logical sequence of steps, assumptions, and estimations.
Key Assumptions:
1. Investment in Automation (Phase 1) - 10 Years:
- Government invests in automation across industries, totaling BRL 70 billion over 10 years. This covers subsidies, grants, lines of credit for businesses, R&D for automation technologies, and infrastructure investment.
2. Progressive Taxation on Automation (Phase 2) - 10 Years:
- As automation is implemented, businesses are taxed progressively on their automated systems and labor replacement. The tax rate starts at 2% and gradually increases to 10% over the 10-year period, based on the total scale of automation and the added value it generates.
3. Tax Revenue from Automation:
- The total automation impact on GDP is estimated to result in 5% annual growth in productivity, translating to increased tax revenue. The automation-driven sectors are expected to produce 10% more GDP output annually by year 10.
4. Reskilling Investments:
- The tax revenue generated from automation will be reinvested into workforce reskilling programs, targeting displaced workers and preparing the workforce for new high-skilled jobs. The reinvestment in reskilling will be progressively increased each year, starting at 5% of tax revenue and growing to 30% of tax revenue by year 10.
---
Phase 1: Investment in Automation (Years 1-10)
1. Total Investment in Automation:
- The government invests BRL 70 billion over 10 years, at an average rate of BRL 7 billion annually.
2. Breakdown of Investments:
- Automation Subsidies & Loans: BRL 50 billion (initial year investments, gradually disbursed).
- R&D Grants: BRL 10 billion for research into automation technology.
- Infrastructure (Broadband, Data Centers, AI Innovation): BRL 10 billion to upgrade digital infrastructure.
---
Phase 2: Progressive Taxation on Automation (Years 2-10)
1. Year 1:
Tax revenue from automation will be low due to a delayed implementation period, so we start with a 2% tax on the value added by automation. The total value added by automation is assumed to be 10% of GDP by Year 10.
- Estimated contribution of automation to GDP by year 10: BRL 500 billion (assuming automation’s impact on the economy grows progressively).
- Tax Revenue (Year 1): 2% of BRL 50 billion = BRL 1 billion.
2. Year 2 to Year 10:
- Tax rates increase gradually each year, from 2% to 10%, and as automation expands, the total automation-driven GDP grows from BRL 50 billion to BRL 500 billion.
Here’s how the tax revenue would evolve:
| Year | Tax Rate | Automation GDP Contribution | Tax Revenue |
|----------|--------------|----------------------------------|-----------------|
| Year 1 | 2% | BRL 50 billion | BRL 1 billion |
| Year 2 | 3% | BRL 100 billion | BRL 3 billion |
| Year 3 | 4% | BRL 150 billion | BRL 6 billion |
| Year 4 | 5% | BRL 200 billion | BRL 10 billion |
| Year 5 | 6% | BRL 250 billion | BRL 15 billion |
| Year 6 | 7% | BRL 300 billion | BRL 21 billion |
| Year 7 | 8% | BRL 350 billion | BRL 28 billion |
| Year 8 | 9% | BRL 400 billion | BRL 36 billion |
| Year 9 | 10% | BRL 450 billion | BRL 45 billion |
| Year 10| 10% | BRL 500 billion | BRL 50 billion |
---
Phase 3: Reinvestment into Reskilling Programs (Years 2-10)
As the government receives tax revenue from automation, it will reinvest a growing portion into reskilling programs for the displaced workforce.
1. Reskilling Budget:
- Year 1: BRL 0 (no tax revenue yet, the reskilling program is developed and ready for implementation).
- Year 2: 5% of BRL 3 billion = BRL 150 million.
- Year 3: 10% of BRL 6 billion = BRL 600 million.
- Year 4: 15% of BRL 10 billion = BRL 1.5 billion.
- Year 5: 20% of BRL 15 billion = BRL 3 billion.
- Year 6: 25% of BRL 21 billion = BRL 5.25 billion.
- Year 7: 30% of BRL 28 billion = BRL 8.4 billion.
- Year 8: 30% of BRL 36 billion = BRL 10.8 billion.
- Year 9: 30% of BRL 45 billion = BRL 13.5 billion.
- Year 10: 30% of BRL 50 billion = BRL 15 billion.
2. Reskilling Investments:
Over 10 years, the total reinvestment into workforce reskilling programs would be around BRL 58 billion.
---
Total Investment & Tax Revenue Over 10 Years:
| Category | Total Investment | Annual Investment | Tax Revenue from Automation | Reskilling Investment |
|---------------------------------|----------------------|------------------------|--------------------------------|---------------------------|
| Automation Investments (Gov)| BRL 70 billion | BRL 7 billion/year | - | - |
| Tax Revenue (Gov) | - | - | BRL 204 billion (cumulative) | - |
| Reskilling Investments | - | - | - | BRL 58 billion (cumulative)|
| Total Investment (Gov) | BRL 70 billion | BRL 7 billion/year | BRL 204 billion | BRL 58 billion |
---
Projected Long-Term Impact:
1. Tax Revenue Growth:
By the end of 10 years, the government will have accumulated an estimated BRL 204 billion from taxing automation in the form of value-added taxes and other taxes related to automation-driven GDP growth.
2. Job Creation:
Although automation displaces certain jobs, it also creates high-value jobs in AI, robotics, engineering, and tech. It is estimated that 500,000 workers will be reskilled and integrated into high-tech jobs over 10 years, with each job contributing BRL 50,000 in annual tax revenue.
Total Tax Revenue from New Jobs:
500,000 new jobs × BRL 50,000 = BRL 25 billion annually.
---
Conclusion:
The government invests BRL 70 billion over 10 years in automation, with tax revenue from automation totaling BRL 204 billion over the decade. With BRL 58 billion reinvested into workforce reskilling programs, automation can drive economic growth, create high-value jobs, and generate significant tax revenue to fund these initiatives. The program will lead to a net positive economic impact, with substantial returns through taxes and long-term workforce productivity increases.
***
Key Assumptions:
1. Investment in Automation (Phase 1) - 10 Years:
- Government invests in automation across industries, totaling BRL 70 billion over 10 years. This covers subsidies, grants, lines of credit for businesses, R&D for automation technologies, and infrastructure investment.
2. Progressive Taxation on Automation (Phase 2) - 10 Years:
- As automation is implemented, businesses are taxed progressively on their automated systems and labor replacement. The tax rate starts at 2% and gradually increases to 10% over the 10-year period, based on the total scale of automation and the added value it generates.
3. Tax Revenue from Automation:
- The total automation impact on GDP is estimated to result in 5% annual growth in productivity, translating to increased tax revenue. The automation-driven sectors are expected to produce 10% more GDP output annually by year 10.
4. Reskilling Investments:
- The tax revenue generated from automation will be reinvested into workforce reskilling programs, targeting displaced workers and preparing the workforce for new high-skilled jobs. The reinvestment in reskilling will be progressively increased each year, starting at 5% of tax revenue and growing to 30% of tax revenue by year 10.
---
Phase 1: Investment in Automation (Years 1-10)
1. Total Investment in Automation:
- The government invests BRL 70 billion over 10 years, at an average rate of BRL 7 billion annually.
2. Breakdown of Investments:
- Automation Subsidies & Loans: BRL 50 billion (initial year investments, gradually disbursed).
- R&D Grants: BRL 10 billion for research into automation technology.
- Infrastructure (Broadband, Data Centers, AI Innovation): BRL 10 billion to upgrade digital infrastructure.
---
Phase 2: Progressive Taxation on Automation (Years 2-10)
1. Year 1:
Tax revenue from automation will be low due to a delayed implementation period, so we start with a 2% tax on the value added by automation. The total value added by automation is assumed to be 10% of GDP by Year 10.
- Estimated contribution of automation to GDP by year 10: BRL 500 billion (assuming automation’s impact on the economy grows progressively).
- Tax Revenue (Year 1): 2% of BRL 50 billion = BRL 1 billion.
2. Year 2 to Year 10:
- Tax rates increase gradually each year, from 2% to 10%, and as automation expands, the total automation-driven GDP grows from BRL 50 billion to BRL 500 billion.
Here’s how the tax revenue would evolve:
| Year | Tax Rate | Automation GDP Contribution | Tax Revenue |
|----------|--------------|----------------------------------|-----------------|
| Year 1 | 2% | BRL 50 billion | BRL 1 billion |
| Year 2 | 3% | BRL 100 billion | BRL 3 billion |
| Year 3 | 4% | BRL 150 billion | BRL 6 billion |
| Year 4 | 5% | BRL 200 billion | BRL 10 billion |
| Year 5 | 6% | BRL 250 billion | BRL 15 billion |
| Year 6 | 7% | BRL 300 billion | BRL 21 billion |
| Year 7 | 8% | BRL 350 billion | BRL 28 billion |
| Year 8 | 9% | BRL 400 billion | BRL 36 billion |
| Year 9 | 10% | BRL 450 billion | BRL 45 billion |
| Year 10| 10% | BRL 500 billion | BRL 50 billion |
---
Phase 3: Reinvestment into Reskilling Programs (Years 2-10)
As the government receives tax revenue from automation, it will reinvest a growing portion into reskilling programs for the displaced workforce.
1. Reskilling Budget:
- Year 1: BRL 0 (no tax revenue yet, the reskilling program is developed and ready for implementation).
- Year 2: 5% of BRL 3 billion = BRL 150 million.
- Year 3: 10% of BRL 6 billion = BRL 600 million.
- Year 4: 15% of BRL 10 billion = BRL 1.5 billion.
- Year 5: 20% of BRL 15 billion = BRL 3 billion.
- Year 6: 25% of BRL 21 billion = BRL 5.25 billion.
- Year 7: 30% of BRL 28 billion = BRL 8.4 billion.
- Year 8: 30% of BRL 36 billion = BRL 10.8 billion.
- Year 9: 30% of BRL 45 billion = BRL 13.5 billion.
- Year 10: 30% of BRL 50 billion = BRL 15 billion.
2. Reskilling Investments:
Over 10 years, the total reinvestment into workforce reskilling programs would be around BRL 58 billion.
---
Total Investment & Tax Revenue Over 10 Years:
| Category | Total Investment | Annual Investment | Tax Revenue from Automation | Reskilling Investment |
|---------------------------------|----------------------|------------------------|--------------------------------|---------------------------|
| Automation Investments (Gov)| BRL 70 billion | BRL 7 billion/year | - | - |
| Tax Revenue (Gov) | - | - | BRL 204 billion (cumulative) | - |
| Reskilling Investments | - | - | - | BRL 58 billion (cumulative)|
| Total Investment (Gov) | BRL 70 billion | BRL 7 billion/year | BRL 204 billion | BRL 58 billion |
---
Projected Long-Term Impact:
1. Tax Revenue Growth:
By the end of 10 years, the government will have accumulated an estimated BRL 204 billion from taxing automation in the form of value-added taxes and other taxes related to automation-driven GDP growth.
2. Job Creation:
Although automation displaces certain jobs, it also creates high-value jobs in AI, robotics, engineering, and tech. It is estimated that 500,000 workers will be reskilled and integrated into high-tech jobs over 10 years, with each job contributing BRL 50,000 in annual tax revenue.
Total Tax Revenue from New Jobs:
500,000 new jobs × BRL 50,000 = BRL 25 billion annually.
---
Conclusion:
The government invests BRL 70 billion over 10 years in automation, with tax revenue from automation totaling BRL 204 billion over the decade. With BRL 58 billion reinvested into workforce reskilling programs, automation can drive economic growth, create high-value jobs, and generate significant tax revenue to fund these initiatives. The program will lead to a net positive economic impact, with substantial returns through taxes and long-term workforce productivity increases.
***
