Andrew Yang says we should stop taxing workers — and start taxing AI

In a recent interview on CNBC's Squawk Box, Andrew Yang, the founder of the Forward Party and former presidential candidate, argued that the United States is misdirecting its tax policies amid the rapid evolution of artificial intelligence. Yang stated that as AI technologies increasingly take over human roles, the focus should shift from taxing workers to imposing higher taxes on companies that benefit from automation. Yang emphasized that traditionally, taxes are levied on activities that governments wish to diminish. He pointed out that, with AI potentially replacing a significant portion of entry-level white-collar jobs—up to 50% in the next five years, according to Anthropic CEO Dario Amodei—it is time to reconsider the taxation of labor. The tech industry has seen a wave of layoffs, with many executives citing AI-led restructuring as the reason. For example, Atlassian recently announced the elimination of 1,600 positions, an action described by its CEO as part of a strategic shift towards the "AI era." Yang sees these layoffs as just the beginning and highlighted a recent AI conference where experts predicted that advancements in the next six months could surpass the achievements of the past decade. He noted that one company, specializing in autonomous coding tools for large enterprises, saw its revenue soar by 100 times in just a year. Yang warned that if this momentum continues, AI will consume technology budgets that were previously allocated to human engineers, leading to significant disruptions in the job market. Yang's perspective is gaining traction among others who believe in rethinking the tax system in light of AI advancements. Billionaire venture capitalist Vinod Khosla suggested that eliminating income taxes for most Americans might be a viable solution if AI leads to widespread job losses. Additionally, Senator Bernie Sanders has proposed a "robot tax" on companies that replace jobs with AI. Yang concluded by expressing concern over the implications of these changes, stating, "The implicit social contract of the American way is being fractured."