US Politicians Advance AI Tax Proposals as Labor’s Share Holds Near 70%
Updated
Updated · The Washington Post · Jul 21
US Politicians Advance AI Tax Proposals as Labor’s Share Holds Near 70%
3 articles · Updated · The Washington Post · Jul 21
Summary
Republicans and Democrats are converging on proposals to tax AI, with Donald Trump, Josh Hawley, Bernie Sanders and Ro Khanna all backing versions meant to return AI gains to workers.
The argument against those taxes is that the core premise is flawed: labor’s share of national income has stayed around 70% for nearly a century, while real wages have risen more than 40% since the 1990s.
Capital and labor already face roughly similar federal tax burdens—top marginal rates near 40% and average rates about half that—undercutting claims that investment income is systematically favored.
Instead of new AI levies, the piece argues Washington should cut income and payroll taxes, tax wealth when it is spent rather than when it is invested, and repeal AI-related subsidies such as Chips Act support and state data-center breaks.