US Politicians Push AI Taxes Despite 70% Labor Share, Cato's Michel Says
Updated
Updated · The Washington Post · Jul 21
US Politicians Push AI Taxes Despite 70% Labor Share, Cato's Michel Says
1 articles · Updated · The Washington Post · Jul 21
Summary
Trump, Josh Hawley, Bernie Sanders and Ro Khanna are backing ideas to tax AI companies, AI tokens or large AI fortunes in the name of helping workers.
Michel argues the premise is wrong, saying labor's share of national income has held near 70% for almost a century and real wages have risen more than 40% since the 1990s.
He also disputes the claim that capital is taxed less than labor, writing that both face top federal marginal rates of about 40% and average rates near half that.
Instead of new AI levies, he calls for lower income and payroll taxes, consumption-based taxation of wealth when spent, and an end to subsidies for data centers, chips and energy projects.
The broader argument is that AI investment raises worker productivity and wages, so taxing the technology would undercut the workers policymakers say they want to protect.