New York Times DealBook: Everyone Wants to Tax A.I. The Big Disagreement: How?, by Peter Coy:
Artificial intelligence is making some people rich and others feel left out. Unsurprisingly, then, proposals to tax A.I. for the benefit of the public are multiplying like the fingers on an A.I.-generated hand. Some make sense. Others, not so much. …
Take partial ownership of A.I. companies. Senator Bernie Sanders … [plans] to introduce a bill imposing a one-time tax on leading A.I. companies that would give the public half of their shares, to be placed in a sovereign wealth fund modeled on Alaska’s, which collects oil dividends. … Sanders proposed the government take a stake in A.I. companies after seeing an article on it by a pair of law professors, Jeremy Bearer-Friend [George Washington) and Sarah Polcz [UC-Davis], who have been presenting the concept at conferences for a couple of years [Sharing the Algorithm: The Tax Solution to Generative AI, 17 Colum. J. Tax L. 1 (2025)]. In Britain, a similar plan was floated by Liam Epstein of the University of Cambridge. OpenAI itself proposed a plan in April that would involve the government taking some ownership in A.I. companies, as well as “the broader set of firms adopting and deploying A.I.”
The skeptics’ take. Owning stakes in A.I. companies, whether through taxation or purchase, wouldn’t solve every problem. On one hand, it would allow “the public interest to be weighed” in decision-making, Bearer-Friend and Polcz wrote in The Hill [Let the Public Share in the Rewards of Artificial Intelligence]. But in the same piece, they said their proposal “aligns the Treasury with investors who have a stake in preserving the value of their shares.” How are the fund managers supposed to vote when the interests of investors and the public diverge? Taking a stake in A.I. isn’t going to prevent it from inventing a superbug or setting off a nuclear war. Regulation and supervision are more likely to succeed in that difficult task.
Tax the use of A.I. A tax on tokens — the units of A.I. processing — would raise money. It would also at least slightly discourage the use of A.I. by making it more expensive. Customers are already complaining that it costs too much, “a huge issue,” OpenAI’s Altman said this month. …
The skeptics’ take. Economists such as Virginia’s Lockwood tend to say that if you’re going to tax the use of A.I., it’s cleaner to tax it as a final product, not when it’s being used as an input in some company’s production process. So, yes to a tax on somebody using ChatGPT to write a love letter, but no to a tax on somebody using it to build an advertising campaign. The logic is that it’s economically inefficient to discourage businesses’ use of A.I. It’s more efficient to let them use as much it as they need to maximize their profits, and then tax those profits.
Tax capital broadly. Among economists, the conventional wisdom is that capital and labor need each other. Taxing machines, computers, software and so on hurts workers by depriving them of the tools they need to become more productive and earn more money, the logic goes. But the economist Philip Trammell and the tech podcaster Dwarkesh Patel argued on Substack in December that “a world of advanced robotics and A.I.,” which is coming soon, undermines that conventional wisdom.
The skeptics’ take. Brian Albrecht, the chief economist at the International Center for Law & Economics, fired back on Substack earlier this year that economists’ conventional wisdom remains correct as long as the robots haven’t completely taken over. “A compute tax is a REALLY dumb idea,” he headlined a follow-up piece this month.
Tax consumption. If taxing capital isn’t a great idea, and if taxes on labor income dry up because A.I. kills jobs, what’s left? The natural alternative is to tax what people consume. …
The skeptics’ take. This presumes that A.I. is generating so much value that people consume more than ever while working less than ever. That’s a reasonable presumption for the medium term, but maybe not forever.
A sci-fi scenario. So far we’ve been assuming that A.I. is working in the service of humanity, helping produce more and more goods and services that people need. What will happen if it starts to invest in itself for its own purposes? …
A sci-fi scenario. So far we’ve been assuming that A.I. is working in the service of humanity, helping produce more and more goods and services that people need. What will happen if it starts to invest in itself for its own purposes?
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