Governments should tax capital, not labor, as AI makes human work less central to the economy

impact-on-labor ai economics policy labor-rights ai-policy ai-regulation

Share this with your representatives, journalists and friends

Arguments for

Correct the automation tax bias

Supporters say current tax rules tax wages more heavily than capital and AI investment, creating a direct fiscal incentive to replace people with machines. They argue governments should narrow or reverse that gap so firms choose on real productivity and AI is used to augment workers rather than because the tax code makes automation cheaper.

In the United States, for example, labor income is taxed significantly more than capital income. If a business pays a worker $100, it will have to hand over as much as $30 in tax and spending obligations. But paying $100 for automation equipment leads to a tax burden of less than…

Daron Acemoglu · Jul 28, 2026 · full quote
The fact that our tax system taxes income from work far more heavily than income from capital gives firms a direct tax incentive to automate a worker out of a job rather than employing them, and could see AI facilitate a further shift of national income away from labour and towar…

Neil Duncan-Jordan · Jul 8, 2026 · full quote
The right answer is the opposite and simpler: stop overtaxing labour relative to capital. Close the gap that the tax code has opened between a human and a machine, so that the choice between them is made on real productivity and not on fiscal arbitrage.

Pedro Santa-Clara · Jun 30, 2026 · full quote
Our tax code shouldn’t favor buying software over hiring people.

Sarita Gupta · Jun 29, 2026 · full quote
If capital is taxed more and labor less, replacing people with AI is no longer the cheapest path, and using AI to augment human workers rather than replace them becomes a more attractive option.

Ravi Kumar S. · Apr 9, 2026 · full quote
Building an economy that works for all of us will require multiple policy responses. But it starts by acknowledging: it’s time to tax AI and invest in people. [...] Right now, companies pay payroll taxes for their workers but get tax breaks for investing in technology—effectively…

Elizabeth Warren · May 27, 2026 · full quote

Protect fiscal capacity

Another case is fiscal sustainability: if AI reduces wage income's role and shifts returns toward capital, salary-linked tax systems will leave revenue on the table and struggle to fund existing programs. These quotes therefore call for stronger taxes on capital income, profits, or similar returns, sometimes with international coordination, so revenue follows where income is being made.

While we project that AI growth will raise revenue, without substantial changes to how the U.S. taxes capital income, the federal government will be leaving a lot of revenue on the table.

John Iselin · Jul 20, 2026 · full quote
As machines replace human labour, welfare states built on salary-linked taxation will need fundamental redesign. There is a strong case for taxing capital more heavily, particularly when profits reflect market dominance or windfall gains.

Ljubica Nedelkoska · Jun 16, 2026 · full quote
If governments continue to rely on wage taxes while fewer people earn wages, the system will stop working properly. Changing how profits are taxed helps ensure tax revenue continues to align with where the money is actually being made.

Andrew Pery · May 7, 2026 · full quote
Fiscal policy should therefore pursue three joint objectives: capture AI’s productivity gains while managing transition risks, protect fiscal capacity as labor income becomes less central, and strengthen social protection.

World Bank · Jun 2026 · full quote
If AI leads to a transformation, where the labor share goes down by a lot more and the capital share goes up by a lot more, you can't run the kinds of programs you're running, in terms of entitlements, without having a higher capital income tax. It's just not viable.

Gita Gopinath · 2026 · full quote
Tax revenues globally could be at risk from transformative artificial intelligence (TAI) due to a shift from labor to capital, the concentration of economic profits, and weak international tax coordination. [...] A progressive global corporate profit tax would help counteract suc…

Deric Cheng · 2026 · full quote

Share gains and curb inequality

A separate argument centers on distribution. These quotes warn that AI-generated wealth may accrue mainly to investors and owners of capital, so higher taxes on capital gains, profits, or relevant companies are needed to make beneficiaries pay more and to finance transition programs or long-term income support such as UBI.

The AI economy should not become another engine for inequality. The wealthiest beneficiaries of AI should pay their fair share just like working people do.

Edward J. Markey · Jul 10, 2026 · full quote
What is reasonable to assume is that with AI, the share of gross domestic product that goes to capital will increase at the expense of the share that goes to labor. There will be fewer workers needed for the same level of production. This can only increase inequality, since capit…

Branko Milanovic · Jun 22, 2026 · full quote
If AI-driven labor displacement ends up being large in magnitude and permanently drives down the demand for labor, it will likely be necessary to go beyond mere incentive programs to long-term income support for a significant fraction of the labor force. Mechanisms such as univer…

Dario Amodei · Jun 2026 · full quote
The only way to pay for UBI is to massively tax those enormously rich people who own the UBI machines.

Jesse Rothstein · May 22, 2026 · full quote

Arguments against

Innovation and competitiveness risks

Opponents argue that taxing AI-related capital, compute, or machine-intensive infrastructure would raise the cost of productive investment and could slow or even block innovation. Because capital is mobile and AI depends on scalable investment, they say such taxes would hurt productivity and global competitiveness rather than solve disruption.

The features of AI that people worry about (easy substitution between capital and labor, mobile capital, self-replicating infrastructure) are exactly the features that make capital taxation counterproductive.

Brian Albrecht · Jun 18, 2026 · full quote
Raising the cost of all those innovation- and productivity-enhancing uses of computing would unequivocally harm American productivity, innovation, and global competitiveness. Knowingly imposing these costs on ourselves because of concerns about certain disruptive consequences of …

Max Gulker · Jun 2, 2026 · full quote
We should not respond to AI by taxing capital, compute, data centers, or other forms of productive investment more heavily. And we definitely should not pretend that taxing servers, chips, algorithms, or machine-intensive infrastructure solves the deeper problem.

Vance Ginn · Apr 28, 2026 · full quote
Why pick on robots? [...] I don't think simply trying to resist or stop technology is a viable strategy. I don't think it would be a viable strategy if it was adoptable on a global basis, but it's even less viable for a single country in international competition. A sufficiently …

Lawrence Summers · 2017 · full quote
Policymakers should not focus on slowing the development of AI through an AI compute tax; they should focus on helping workers transition to a labor force increasingly augmented by AI.

Meghan Ostertag · Jun 8, 2026 · full quote

Premise seen as premature

Some critics dispute the premise that policymakers should redesign taxes around a coming collapse in labor income and surge in capital gains, calling that story wrong, premature, or based on outlandish scenarios. They would focus instead on diffusing AI widely and on worker training, unemployment insurance, and other adjustment policies.

The proposals differ in detail, but they cite the same story: Labor’s share of national income has declined, and AI is accelerating workers’ losses by shifting more economic activity to capital. The tax code makes all of this worse by undertaxing capital relative to labor. Every …

Adam Michel · Jun 18, 2026 · full quote
As such, policymakers should refrain from changing the tax base on the assumption that labor income will decline while corporate capital gains increase. Instead, they should focus on diffusing AI across the economy to ensure U.S. businesses remain globally competitive and on supp…

Trelysa Long · May 14, 2026 · full quote
Policymakers should not adopt tax policies designed for outlandish AI technology scenarios, but some policies are justified regardless of scenario, such as shifting to consumption-based taxation and reforming unemployment insurance and the tax treatment of worker training.

Alex Muresianu · Feb 3, 2026 · full quote

Prefer consumption over capital

Another line of opposition accepts that labor taxes may become less viable but argues the replacement should not be heavier taxes on capital. These quotes favor shifting more revenue collection toward consumption-based taxation and related reforms, which they see as more compatible with innovation.

As labor income taxation becomes less viable, the primary lesson is that consumption taxation must carry more fiscal weight. This shift aligns naturally with pro-innovation policies, as consumption taxes avoid penalizing the capital investments essential for future innovation. [.…

Anton Korinek · 2026 · full quote
Policymakers should not adopt tax policies designed for outlandish AI technology scenarios, but some policies are justified regardless of scenario, such as shifting to consumption-based taxation and reforming unemployment insurance and the tax treatment of worker training.

Alex Muresianu · Feb 3, 2026 · full quote
AI threatens to erode the first pillar—taxes on labor—by reducing demand for human labor across many occupations. [...] The main burden of taxation will have to shift away from labor.

Anton Korinek · 2026 · full quote

Middle ground

Targeted and conditional design

Some participants back a move toward capital-based revenues only in carefully designed ways: avoiding blunt robot or compute taxes, using targeted measures on capital gains, corporate profits, or automated labor, and tying them to actual displacement or sustained AI-driven returns. They also emphasize safeguards against base erosion and the fact that the right design may depend on whether a country owns or imports the automation.

Avoiding blunt “robot taxes,” strengthening capital income taxation at the individual level with safeguards against base erosion, and leveraging AI to improve compliance and enforcement are important across scenarios.

International Monetary Fund · 2026 · full quote
If AI-driven labor displacement ends up being large in magnitude and permanently drives down the demand for labor, it will likely be necessary to go beyond mere incentive programs to long-term income support for a significant fraction of the labor force. Mechanisms such as univer…

Dario Amodei · Jun 2026 · full quote
The appropriate policy depends decisively on whether a country owns the automation or imports it: for a host that owns the rent the problem is domestic inequality, reached by progressive and wealth taxes; for a rent-importing host the problem is base erosion and a gradual transfe…

Leonard Wossnig · Jun 7, 2026 · full quote
I also want to see us encouraging international discussion in the OECD and the United Nations about taxation—taxation of permanent establishment, capital gains and the cost of human labour compared with tokens. That does not need to have an immediate impact; we could set a thresh…

Anneliese Dodds · Jul 8, 2026 · full quote
Policymakers could rebalance the tax base by increasing reliance on capital-based revenues—such as higher taxes on capital gains at the top, corporate income, or targeted measures on sustained AI-driven returns—and by exploring new approaches such as taxes related to automated la…

OpenAI · Apr 2026 · full quote

Insights

Several supporters frame the issue as equalizing the tax treatment of labor and capital, while several opponents frame capital taxation as a penalty on innovation.
A central disagreement is empirical: proponents expect AI to shift income and taxable capacity from labor to capital, while critics call that assumption wrong, premature, or outlandish.
Both sides often pair their tax views with worker-adjustment measures, but supporters more often present capital taxes as a funding source for those programs.
Even among supporters, the preferred tools vary widely across the quotes, including capital gains taxes, wealth taxes, corporate profit taxes, and levies tied to automated labor or displacement.
The quotes come from economists, elected officials, international institutions, labor organizations, and AI company leaders, showing that the debate cuts across sectors.

Most supportive quotes argue that AI could make wage-based taxation less sustainable and that existing tax rules already tilt firms toward automation and concentrate gains in capital ownership. Opposing quotes dispute either the economic premise or the policy inference, warning that heavier taxes on capital or AI could impede innovation and that other tax bases, especially consumption, or adjustment policies may be preferable. Much of the remaining disagreement concerns design, timing, and international coordination rather than a single agreed instrument.

Cast your vote:

Results (54 votes):

Total (54 votes)

For 45 (83%) Abstain 0 (0%) Against 9 (17%)

For (44)

Daron Acemoglu
Nobel laureate economist; MIT Institute Professor; author of Power and Progress

I am this person! Add a sourced quote Report comment

votes For and says:

In the United States, for example, labor income is taxed significantly more than capital income. If a business pays a worker $100, it will have to hand over as much as $30 in tax and spending obligations. But paying $100 for automation equipment lead...
more AI Verified source (Jul 28, 2026)

added 12d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Trades Union Congress (TUC)
Federation of trade unions in England and Wales representing working people.

I am this person! Add a sourced quote Report comment

votes For and says:

HMT should capture productivity gains for public use through wealth taxation, equalisation of capital gains and income tax, review incentives for investment in labour-augmenting technology, and increase the bank surcharge.
AI Verified source (Jul 22, 2026)

added 18h ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
John Iselin
Economist and analyst at Yale University’s Budget Lab, researching fiscal policy and AI-driven economic change.

I am this person! Add a sourced quote Report comment

votes For and says:

While we project that AI growth will raise revenue, without substantial changes to how the U.S. taxes capital income, the federal government will be leaving a lot of revenue on the table.
AI Verified source (Jul 20, 2026)

added 20d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Edward J. Markey
U.S. Senator from Massachusetts

I am this person! Add a sourced quote Report comment

votes For and says:

The AI economy should not become another engine for inequality. The wealthiest beneficiaries of AI should pay their fair share just like working people do.
AI Verified source (Jul 10, 2026)

added 24d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Neil Duncan-Jordan
UK Member of Parliament for Poole.

I am this person! Add a sourced quote Report comment

votes For and says:

The fact that our tax system taxes income from work far more heavily than income from capital gives firms a direct tax incentive to automate a worker out of a job rather than employing them, and could see AI facilitate a further shift of national inc...
more AI Verified source (Jul 8, 2026) 1 of 2

added 20d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Dr Ben Spencer
UK Conservative Member of Parliament for Runnymede and Weybridge; former NHS psychiatrist.

I am this person! Add a sourced quote Report comment

votes For and says:

I also want to see us encouraging international discussion in the OECD and the United Nations about taxation—taxation of permanent establishment, capital gains and the cost of human labour compared with tokens.
AI Verified source (Jul 8, 2026)

added 20d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Anneliese Dodds
UK Labour Member of Parliament for Oxford East; former Chair of the Labour Party.

I am this person! Add a sourced quote Report comment

votes For and says:

I also want to see us encouraging international discussion in the OECD and the United Nations about taxation—taxation of permanent establishment, capital gains and the cost of human labour compared with tokens. That does not need to have an immediate...
more AI Verified source (Jul 8, 2026)

added 24d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Pedro Santa-Clara
Professor of Finance at Nova School of Business and Economics; former UCLA finance professor and NBER research associate.

I am this person! Add a sourced quote Report comment

votes For and says:

The right answer is the opposite and simpler: stop overtaxing labour relative to capital. Close the gap that the tax code has opened between a human and a machine, so that the choice between them is made on real productivity and not on fiscal arbitra...
more AI Verified source (Jun 30, 2026)

added 23d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Xavier de Souza Briggs
Senior Fellow at Brookings Metro, researching economic mobility, cities, and AI's workforce impacts.

I am this person! Add a sourced quote Report comment

votes For and says:

Reforming the tax code to put the value of labor for business on a more level playing field with that of invested capital [is] an additional lever for “building pro-worker AI.”
AI Verified source (Jun 29, 2026)

added 8d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Sarita Gupta
U.S. labor and economic-justice advocate; Vice President of U.S. Programs at the Ford Foundation.

I am this person! Add a sourced quote Report comment

votes For and says:

Our tax code shouldn’t favor buying software over hiring people.
AI Verified source (Jun 29, 2026)

added 8d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Branko Milanovic
Economist and professor at the City University of New York, specializing in global inequality.

I am this person! Add a sourced quote Report comment

votes For and says:

What is reasonable to assume is that with AI, the share of gross domestic product that goes to capital will increase at the expense of the share that goes to labor. There will be fewer workers needed for the same level of production. This can only in...
more AI Verified source (Jun 22, 2026)

added 22d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Ljubica Nedelkoska
Faculty member at the Complexity Science Hub in Vienna, writing on labour markets, technology, and public policy.

I am this person! Add a sourced quote Report comment

votes For and says:

As machines replace human labour, welfare states built on salary-linked taxation will need fundamental redesign. There is a strong case for taxing capital more heavily, particularly when profits reflect market dominance or windfall gains.
AI Verified source (Jun 16, 2026)

added 24d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Leonard Wossnig
Author of a 2026 economic model on automation, AI rents, and taxation.

I am this person! Add a sourced quote Report comment

votes For and says:

The appropriate policy depends decisively on whether a country owns the automation or imports it: for a host that owns the rent the problem is domestic inequality, reached by progressive and wealth taxes; for a rent-importing host the problem is base...
more AI Verified source (Jun 7, 2026)

added 1d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Dario Amodei
CEO at Anthropic

I am this person! Add a sourced quote Report comment

votes For and says:

If AI-driven labor displacement ends up being large in magnitude and permanently drives down the demand for labor, it will likely be necessary to go beyond mere incentive programs to long-term income support for a significant fraction of the labor fo...
more AI Verified source (Jun 2026)

added 24d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Greg Casar
U.S. Representative from Texas; Chair of the Congressional Progressive Caucus

I am this person! Add a sourced quote Report comment

votes For and says:

Our tax system basically gives companies huge tax savings when they automate a job, because we currently tax wages but not AI. If you replace a worker with an AI-powered robot, you save on payroll taxes: That’s functionally a tax break. That’s wrong,...
more AI Verified source (May 28, 2026)

added 1mo ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Damon Segal
Digital-transformation leader and author writing about artificial intelligence, automation, and fiscal policy.

I am this person! Add a sourced quote Report comment

votes For and says:

Future taxation likely to focus on consumption, economic rents, and capital ownership rather than labour.
AI Verified source (May 27, 2026)

added 23d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Jesse Rothstein
Professor of public policy and economics at the University of California, Berkeley; former chief economist at the U.S. Department of Labor.

I am this person! Add a sourced quote Report comment

votes For and says:

The only way to pay for UBI is to massively tax those enormously rich people who own the UBI machines.
AI Verified source (May 22, 2026)

added 2d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Pope Leo XIV
Head of the Catholic Church

I am this person! Add a sourced quote Report comment

votes For and says:

In the age of AI and robotics, it is no longer possible to rely solely on the “invisible hand” of the market: politics has the task of directing economic-technological dynamics towards the common good, promoting decent work, social inclusion and an e...
more AI Verified source (May 15, 2026)

added 22d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Andrew Pery
AI Ethics Evangelist at ABBYY, writing on artificial intelligence, automation, and public policy.

I am this person! Add a sourced quote Report comment

votes For and says:

If governments continue to rely on wage taxes while fewer people earn wages, the system will stop working properly. Changing how profits are taxed helps ensure tax revenue continues to align with where the money is actually being made.
AI Verified source (May 7, 2026)

added 23d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Allianz Research
Economic research division of Allianz Group, publishing analysis of AI and labor-market impacts.

I am this person! Add a sourced quote Report comment

votes For and says:

Tax systems therefore need to be adjusted to incentivize augmentation rather than the substitution of labor. One proposal is a “robot tax,” aimed at reducing this bias by taxing automation more in line with labor—for example, by limiting preferential...
more AI Verified source (Apr 30, 2026)

added 20d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Alex Bores
New York State Assemblymember

I am this person! Add a sourced quote Report comment

votes For and says:

Our tax code currently rewards companies for replacing workers — subsidizing AI investment while taxing the wages of the people being displaced. We need to reform that, reducing the ability to write off AI investment when it leads to less work.
AI Verified source (Apr 27, 2026)

added 2d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Ravi Kumar S.
Cognizant CEO.

I am this person! Add a sourced quote Report comment

votes For and says:

If capital is taxed more and labor less, replacing people with AI is no longer the cheapest path, and using AI to augment human workers rather than replace them becomes a more attractive option.
AI Verified source (Apr 9, 2026)

added 23d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Sam Altman
CEO at OpenAI

I am this person! Add a sourced quote Report comment

votes For and says:

Capitalism is dependent on a certain balance between labor and capital, and if that gets totally out of whack, then the current system is not going to work.
AI Verified source (Apr 6, 2026)

added 22d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
OpenAI
AI research organization

I am this person! Add a sourced quote Report comment

votes For and says:

Policymakers could rebalance the tax base by increasing reliance on capital-based revenues—such as higher taxes on capital gains at the top, corporate income, or targeted measures on sustained AI-driven returns—and by exploring new approaches such as...
more AI Verified source (Apr 2026)

added 24d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate

Abstain (0)

Against (9)

Adam Michel
Director of tax policy studies at the Cato Institute and writer on tax policy and economic growth.

I am this person! Add a sourced quote Report comment

votes Against and says:

The proposals differ in detail, but they cite the same story: Labor’s share of national income has declined, and AI is accelerating workers’ losses by shifting more economic activity to capital. The tax code makes all of this worse by undertaxing cap...
more AI Verified source (Jun 18, 2026)

added 6d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Brian Albrecht
Chief Economist at the International Center for Law & Economics.

I am this person! Add a sourced quote Report comment

votes Against and says:

The features of AI that people worry about (easy substitution between capital and labor, mobile capital, self-replicating infrastructure) are exactly the features that make capital taxation counterproductive.
AI Verified source (Jun 18, 2026)

added 23d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Meghan Ostertag
Policy analyst at the Information Technology and Innovation Foundation writing on AI, tax policy, and innovation.

I am this person! Add a sourced quote Report comment

votes Against and says:

Policymakers should not focus on slowing the development of AI through an AI compute tax; they should focus on helping workers transition to a labor force increasingly augmented by AI.
AI Verified source (Jun 8, 2026)

added 20d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Max Gulker
Managing director of technology policy at the Reason Foundation.

I am this person! Add a sourced quote Report comment

votes Against and says:

Raising the cost of all those innovation- and productivity-enhancing uses of computing would unequivocally harm American productivity, innovation, and global competitiveness. Knowingly imposing these costs on ourselves because of concerns about certa...
more AI Verified source (Jun 2, 2026)

added 2d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Trelysa Long
Policy analyst and writer at the Information Technology and Innovation Foundation, writing on AI, innovation, and tax policy.

I am this person! Add a sourced quote Report comment

votes Against and says:

As such, policymakers should refrain from changing the tax base on the assumption that labor income will decline while corporate capital gains increase. Instead, they should focus on diffusing AI across the economy to ensure U.S. businesses remain gl...
more AI Verified source (May 14, 2026)

added 24d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate
Vance Ginn
Economist, former White House advisor, President of Pelican Institute

I am this person! Add a sourced quote Report comment

votes Against and says:

We should not respond to AI by taxing capital, compute, data centers, or other forms of productive investment more heavily. And we definitely should not pretend that taxing servers, chips, algorithms, or machine-intensive infrastructure solves the de...
more AI Verified source (Apr 28, 2026)

added 2d ago

Choose a list of delegates

to vote as the majority of them.

Unless you vote directly.

Delegate

Loading more opinions...

More h/impact-on-labor votes

Implement a universal basic income

AI will create a permanent underclass

AI will create more jobs than it destroys

The first company or companies to develop AGI could gain control over a majority of economic activity

The economic gains from frontier AI should be shared with every person on Earth

Back