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Upholding Human Agency in an Era of Evolving Digital Systems

4 min read

AI and Human AgencyTechnology has greatly contributed to improving and streamlining everyday life. However, as technology advances, there is an increased reliance on digital tools powered by artificial intelligence and machine learning. Unfortunately, these technologies are also challenging the fundamental notion of human agency. As a result, there are rising concerns about humans losing the ability to make independent decisions.

What is Human Agency?

Human agency refers to the capacity of individuals to act intentionally and make choices that shape their lives. Although the human agency is influenced by various factors, including social, cultural, and environmental contexts, individuals should maintain the ability to exert some degree of control and influence over their lives. As far as technology is concerned, individuals must retain control and decision-making power. This calls for technologies that support humans in making informed decisions rather than controlling the decisions made.

Concerns Over the Effects of Digital Systems on Human Agency

The Pew Research Center and Elon University’s Imagining the Internet Center conducted a nonscientific canvassing to gather expert views about the future of the human agency.

The experts were specifically asked, “By 2035, will smart machines, bots, and systems powered by artificial intelligence be designed to allow humans to easily be in control of most tech-aided decision-making that is relevant to their lives?”

Of the 540 experts from different fields, 56 percent disagreed with the statement, while 44 percent agreed. Some of the main themes raised by the experts who disagreed with the statement include:

  • The agendas of commercial interests and governments will determine the future.
  • The convenience that comes with automation makes users less vigilant over technology.
  • AI technology’s complexity and rapid evolution can be overwhelming, making it difficult for users to assert their agency.

Common themes raised by participants that agreed with the statement include:

  • Humans also will evolve with technology, and there is the expectation that AI and tech companies will be regulated.
  • Expectations that businesses will protect the human agency to retain public trust and to keep ahead of the competition.
  • Technology will allow varying degrees of human agency.

Key Considerations for Upholding Human Agency

Seeing that technology will keep advancing and more automated systems will be witnessed, it’s crucial to implement ways to help uphold human agency. Some considerations include the following:

  1. Implement mechanisms that contest AI systems. An AI system is as good as the information fed to it. Therefore, it can be faulty or deliberately flawed, and there should be ways to request redress. This can be through AI policies that allow users to contest or rectify a decision made by AI systems.
  2. Empower users through systems that include meaningful choices and controls, enabling users to decide how to interact with them. For example, a system should allow users to adjust preferences, customize settings and choose the features they want. This promotes a sense of ownership and autonomy over digital experiences.
  3. Promote digital literacy and education to teach about technology capabilities and limitations. Technology users must develop critical thinking skills to exercise human agency and make informed decisions.
  4. Integrate ethical principles into technology design and deployment. This can be done by creating guiding ethical frameworks that consider the likely societal impacts and consequences of digital systems.
  5. Guarantee transparency and explainability in technologies and algorithms, providing users with accessible explanations of how decisions are made and what data is utilized. This transparency fosters trust in the technology and empowers individuals to make informed choices.
  6. Establish accountability for the design, development, and implementation of digital systems. Holding individuals and organizations accountable for the impact of their technology helps maintain human agency and promotes ethical behavior.
  7. Implement robust measures to safeguard individuals’ privacy and protect their data. This includes incorporating strong data protection mechanisms, giving users control over their personal information, and establishing clear consent mechanisms for data collection and usage, accompanied by transparent policies. Respecting privacy rights is paramount for preserving human agency in the digital realm.

Conclusion

The essence of being human lies in exercising control over the nature and quality of an individual’s life. However, technological advances such as artificial intelligence are raising concerns about this human ability. Humans are responsible for actively embracing and comprehending the possibilities and implications of living in a world where digital systems take over various tasks and processes. Instead of surrendering their agency, humans should view partnering with these digital systems as a means to supplement and strengthen their intelligence rather than surrendering it.

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Increasing the Federal Debt Limit, Improving Disaster Resources and Attempting to Reduce Government Waste

3 min read

Increasing the Federal Debt Limit, Improving Disaster Resources and Attempting to Reduce Government WasteLimit, Save, Grow Act of 2023 (HR 2811) – This bill was introduced in the House by Rep. Jodey Arrington (R-TX) on April 26. It would authorize and increase the federal debt limit as well as specific cuts in spending, such as repealed energy tax credits, expanded work requirements for the Supplemental Nutrition Assistance Program (SNAP) and other programs, and nullifies regulations for the cancellation of federal student loan debt. This bill passed in the House on April 26 but was not expected to pass in the Senate.

Pharmacy Benefit Manager Reform Act (S 1339) – Co-sponsored by three Republicans, this bipartisan bill would provide for increased oversight of benefits managers that provide pharmacy management services on behalf of health insurers and employer health plans. The bill was introduced by Sen. Bernie Sanders (D-VT) on April 27. A committee report was ordered and returned on May 11, where it awaits assessment by the full Senate.

Fire Suppression and Response Funding Assurance Act (S 479) – This bill is designed to ensure that pre-deployed state and local fire suppression assets are eligible for FEMA’s Fire Management Assistance Grants (FMAG) in an effort to improve the federal government’s response to wildfire disasters. It would adjust the cost share for fire management assistance to no less than 75 percent of the eligible cost. The bill was introduced on March 14 by Sen. Alex Padilla (D-CA). A committee issued its report on the bill on March 29 and it is currently under consideration in the Senate.

National Weather Service Communications Improvement Act (S 1414) – This bill is designed to improve the instant messaging service used by the National Weather Service, as well as other purposes. The bill was introduced by Sen. Maria Cantwell (D-WA) on May 3; its committee report was returned to the Senate on May 10, where it currently awaits review.

NWR Modernization Act of 2023 (S 1416) – Introduced by Sen. Maria Cantwell (D-WA) on May 3, this bill would authorize upgrading and modernizing the National Oceanic and Atmospheric Administration Weather Radio All Hazards Network. The Senate committee issued its report to the Senate on May 10, where it currently awaits review.

A joint resolution providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Environmental Protection Agency relating to “Control of Air Pollution From New Motor Vehicles: Heavy-Duty Engine and Vehicle Standards” (SJ 11) – This joint resolution nullifies the Environmental Protection Agency rule that pertains to the control of air pollution by new motor vehicles. The current rule sets high emission standards for heavy-duty engines and vehicles in order to reduce air pollution. The bill was introduced by Sen. Deb Fisher (R-NE) on Feb. 9 and passed in the Senate on April 26. It is currently awaiting review in the House.

Identifying and Eliminating Wasteful Programs Act (S 666) – Introduced on March 7 by Sen. Margaret Hassan (D-NH), this bill would require the Chief Operating Officer of each federal agency to compile a list of unnecessary programs. The assigned committee issued its report on March 29; it is currently awaiting review in the Senate.

Federal Agency Performance Act of 2023 (S 709) – This Act also is designed to improve performance and accountability within the Federal Government. It was introduced by Sen. Gary Peters (D-MI) on March 8. The assigned committee issued its report for this bill on March 29; it is also awaiting review in the Senate.

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Estate Taxes vs. Inheritance Taxes: Understanding the Differences

4 min read

Estate Taxes vs. Inheritance TaxesEstate and inheritance (“death”) taxes are levied on the transfer of property at death. The difference between an estate tax and an inheritance tax is based on who pays the bill. An estate tax is levied on the estate of the deceased, while an inheritance tax is levied on the heirs of the deceased. That’s the simple explanation. As for execution, there are far more nuances based on the monetary value of a bequest; the status of the beneficiary/(ies); and where you live when you pass away.

Federal Estate Tax

An estate tax applies to the value of the assets left behind by a decedent and is paid out from the proceeds of the estate before the rest of the assets are distributed to heirs. Estate wealth is usually comprised of cash, securities, and real estate.

In 2023, if an estate is valued at more than $12.92 million ($25.84 million for couples), the estate will owe a progressive tax rate levied on the value above that amount. For example, if an estate is valued at $15 million, it will pay estate taxes on the $2,080,000 above the exemption. The federal tax rate ranges from 18 percent to 40 percent, depending on the taxable value of the estate.

Generally, the estate tax applies to only the wealthiest 2 percent of Americans, and only 0.07 percent of estates end up paying the tax, according to the Tax Policy Center. Note that assets inherited by a spouse or charitable organizations are generally not subject to an estate tax.

Some states also levy an estate tax based on the location of the property. Presently, 12 states plus the District of Columbia levy an estate tax:

  • Connecticut
  • District of Columbia
  • Hawaii
  • Illinois
  • Maine
  • Maryland
  • Massachusetts
  • Minnesota
  • New York
  • Oregon
  • Rhode Island
  • Vermont
  • Washington

Estate Tax Strategies

To minimize or eliminate estate taxes, the estate owner has several options. Among the more sophisticated are structuring an Irrevocable Life Insurance Trust, a Family Limited Partnership or funding a Qualified Personal Residence Trust. However, the easiest way to legally avoid estate taxes is to give assets away before you die. Estate owners can make tax-deductible contributions to charitable organizations or gift up to $17,000 in 2023 ($16,000 in 2022) a year, per person, to as many people as you want.

Inheritance Tax

An inheritance tax, on the other hand, is a state tax paid by the beneficiary (heir) of an estate. Not every state levies an inheritance tax, and the laws vary considerably by state. The tax is based on the relationship of the beneficiary to the decedent. For example, in some instances, a beneficiary who is a surviving spouse, parent, child or grandchild may be exempt from the tax, whereas a brother, sister, niece or nephew may be subject to an inheritance tax.

Presently, six states levy an inheritance tax (only Maryland levies both estate and inheritance taxes). Each state sets its own exclusion amount, ranging from $1 million to $9.1 million. Amounts above the state exclusion are then subject to a separate estate tax, which tends to range between 1 percent and 18 percent. The tax applies to decedents who lived in one of these states:

  • Iowa (phasing out tax by 2025)
  • Kentucky
  • Maryland
  • Nebraska
  • New Jersey
  • Pennsylvania

Inheritance Tax Strategies

Similar to estate tax strategies, an estate owner can minimize state inheritance taxes by transferring assets to a trust or family limited partnership or by gifting assets. Be aware that assets owned under a Roth IRA or Roth 401(k) – that has been open for at least five years – are not subject to any taxes since contributions were already taxed and earnings grow tax-free. You also might consider using a portion of your assets to purchase life insurance, naming your heirs as beneficiaries. Since life insurance proceeds are not taxable, this is a way to remove money from the estate to create a larger, tax-free inheritance.

As for current estate assets, one surefire way to legally avoid inheritance taxes is to move to a state that doesn’t levy them.

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How to Look at Liquidity through an Accounting Lens

3 min read

Liquidity, Accounting LiquidityLiquidity refers to a business’s ability to convert its short-term assets or securities into cash quickly to meet its short-term financial obligations or pay bills due within the next 12 months. Naturally, cash is the most liquid. This is different than solvency, which refers to the ability of a business to satisfy its long-term bills.

It’s important to distinguish between market liquidity and accounting liquidity. Market liquidity implies how a nation’s stock market or real estate market functions, specifically if there are enough buyers and sellers. The closer the bid and ask prices are, the greater the level of liquidity that exists. The greater the liquidity, the easier it is for participants to transact.

Determining the liquidity of a business helps investors see how a company balances its cash. This demonstrates how well a company manages its ability to pay bills versus being able to direct money for retained earnings, dividends, reinvesting in its business, or for acquisitions. When it comes to measuring liquidity, there are three ratios that estimate how liquid a business is: current, quick, and cash ratios.

Current Ratio

This compares current assets to current liabilities. It’s expressed as follows:

Current Ratio = Current Assets / Current Liabilities  = $20,000 / $5,000 = 4

This means for every $1 in outstanding bills, the company has $4 in cash available to satisfy those debts. While each industry has a unique target ratio, a range of 1.5 to 2.5 is seen as a healthy measure.

Quick Ratio (Acid-Test Ratio)

This calculation removes inventories and some short-term assets that are more illiquid than incoming payments expected to be paid within a reasonable short-term time frame, such as accounts receivable. It’s expressed as:

Quick Ratio = (Cash and Cash Equivalents + Short-Term Investments + Accounts Receivable) / Current Liabilities   

If the resulting number is less than 1, this could indicate the business is facing an inability to pay its short-term bills.

Cash Ratio

This looks at how well a company can pay off short-term debt with its cash and similar financial assets that can be converted to cash instantaneously. It’s expressed as follows:

Cash Ratio = Cash and Cash Equivalents / Current Liabilities = $10,000 / $3,000 = 3.33

With a 3.33 ratio, this example shows the company is in good shape liquidity-wise. A general reference of at least 0.5 (but higher shows better financial health) is recommended.

Interpreting Results

Once the results are calculated, businesses can analyze their findings and see the financial position of their company. For example, if they are looking for financing, lenders take into account these ratios to determine a level of confidence in debt repayment. If a company is looking for investors, savvy investors can determine how competitive the company is against its industry/sector competitors.

Internal Company Reflection

Depending on the company’s circumstances, changes might need to be implemented immediately and over the long term. A business may need to look at operating costs to cut costs. Cash flow projections are recommended to see how the company is doing on its restructuring and cost-cutting efforts.

When it comes to managing liquidity, using these ratios along with short- and long-term planning to improve a company’s financial and liquidity position can make a business more attractive to lenders and investors and more resistant to economic downturns.

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Financial Tasks to Tackle in the Month of May

4 min read

Financial Tasks to Tackle in the Month of MayNow that spring is here, it might be a great time to give your finances a fresh look. Here are a few key items to put on your May to-do list.

Say Bye-Bye to PMI

If you bought your home for less than 20 percent down, there’s a good chance you’ve been paying private mortgage insurance (aka PMI) on your loan, which is usually an extra 1 percent of what you paid. But here’s the good news: the rise in home prices over the past few years has meant one thing — a bump in your home equity. If your equity position is now at least 20 percent of the original purchase price, you might not have to keep paying your PMI. All you need to do is contact the company that services your mortgage and check things out. You might have to pay several hundred dollars for a new appraisal, but when you compare it to the thousands you could save in a year, it’s well worth it.

Take Advantage of 529 Day

That would be May 29, a day that has been reserved to remind parents of future college students to start saving in a tax-advantaged 529 savings account. Here’s how it works: whatever amount you put in it grows tax-free. And better still, you won’t pay any taxes on withdrawals used to pay for qualified college expenses. You can also use up to $10,000 tax-free for qualified K-12 expenses. How sweet is that?

Get Rid of Unnecessary Financial Documents

Do you have stacks of old tax returns, bill stubs, and old ATM and bank deposit receipts collecting dust inside your filing cabinet? If so, spring is a good time to go through and shred them. For instance, you can toss tax returns after 10 years and ATM and bank receipts after just one year. If you don’t have a shredder, check to see if and when your city holds free shredding days. And don’t forget about your computer, external drives, and mobile devices that also might be getting full. A great resource to securely delete your personal documents is Eraser, a free software program for PCs. Last but not least, clean out your phone. Take a few minutes to delete any unused apps. Digital spring cleaning is always a great idea.

Review Recurring Charges

Do you really need that magazine subscription? How about the channel you bought to watch a show but forgot to cancel? These are the kinds of small charges that can really add up — and cost you over time. Take a look at your credit card statements, give them a good once over, highlight the ones that can go, and then start the process of canceling. If you want to help streamline this process, check out free apps like Rocket Money and Trim. It’ll feel so good when you’re finished.

Budget for Home Improvement Projects

During May, especially Memorial Day, you can find big discounts on materials for all those projects around the house you want to dive into this summer. It’s best not to wait because prices can climb in June and July. If you’re thinking of bigger projects like putting in a deck or repairing your roof, you might need help. That’s why buying the materials in May could help you stretch your budget when it’s time to hire people to do the work. Even if you aren’t 100 percent ready to get started, you can still measure how much decking or roofing you’ll need and take advantage of holiday sales.

Whether you’re saving up, cleaning up or clearing out, May is a great month to take stock of your finances. Who knows? It might put a little spring in your step.

Sources

https://www.consumerreports.org/financial-planning/may-financial-to-do-list/