Comment by Tracy Gordon

The deepest potential for debt reduction comes not when AI's gains are broadly shared, but when AI costs workers their jobs and sends resulting gains from cost savings to the top. But the driver there is the faster growth AI adoption enables. That those gains accrue to capital mutes the debt reduction, however, because capital income is lightly taxed and the tax system reaches only a fraction of it. Were those gains taxed at ordinary rates, federal debt would fall below its current share of GDP. What moves debt is less about whether and how to tax AI and more about how we tax capital.