Tax AI, Not Humans, Again

Hello all, I hope your summer is off to a great start. It snuck up quickly on us, didn’t it?

I was back on CNBC this week to make the case that we should tax AI – and eventually robots – and not humans. They invited me back because I think they’re worried about the impact of AI.

First, the big question – is AI going to displace human workers? Of course it is. You’re going to spend a trillion dollars on AI infrastructure and data centers... and then it won’t affect the labor market? That doesn’t make any sense. You need to have corporations paying hundreds of billions of dollars a year for AI in order to justify the trillion-dollar IPO valuations for OpenAI, SpaceX, and Anthropic. That money’s got to come from somewhere, and workers’ wages are the obvious source.

Let’s say the AI companies’ revenues continue to grow. Right now, they still won’t pay meaningful taxes because they are still losing billions of dollars and not generating taxable income. So you’re in the worst of both worlds - a diminishing need for human labor and no new tax revenue to show for it.

We have made people expensive to employ in myriad ways. For example, let’s say I hire a new whippersnapper at Noble Mobile. My costs will include 10% or so in FICA, state unemployment insurance and other payroll taxes. I’ll pay another 10% or so for that person’s healthcare. Then, the worker will pay 15–25% in income taxes depending. That’s almost half of the amount I might budget for this person that he or she won’t see in their take-home pay, all of which discourages both me from creating the position and hiring and the worker from accepting and showing up on Monday.

Or, I could use Claude or some AI tool to do the work. I pay Anthropic for some tokens and... that’s it. No payroll tax. No healthcare. No income tax.

We have set up a system that dramatically advantages AI when it doesn’t need the help to compete.

So what do we do? We need to try to balance the scales by taxing AI and then lift the taxes on people. Tax AI, not humans.

This isn’t just me talking.

Dario Amodei of Anthropic says, “You should tax AI via a token tax.”

Sam Altman says, “Create a national wealth fund via AI revenue.”

Vinod Khosla says, “Don’t tax the bottom 80% of workers.”

John Arnold says, “We should tax compute to make workers more competitive.”

A lot of smart people are figuring out that we have set ourselves up for a calamitous picture because we punish employers for hiring human beings relative to machines.

Addressing this imbalance is going to be one of the biggest challenges of our time. Are our leaders and institutions up for the challenge?

Of course not. Trump is doing whatever he’s doing and the Democrats are jockeying for position and lying in wait for the ’28 primary.

Multiple trillion-dollar AI IPOs are on tap – we are likely to mint the world’s first trillionaire - and things are changing quickly. What to make of these impending IPOs? The valuations don’t make sense at the topline – and the S&P 500 just balked at changing its rules to accommodate SpaceX, OpenAI and Anthropic. That said, I have never seen so many banks bending over backwards to encourage investment in an IPO. I have the feeling that being first out of the gate will be a lot better than being third given the amounts of demand needed to soak up these shares.

It’s unprecedented.

If we’re going to bet the economy and everyone’s retirement savings on AI, the least we could do is tax it.

For my conversation on CNBC click here. For my recent convo with Gavin Newsom, governor of California, on his podcast click here. To check out Forward Party candidates in your area, click here. To get a copy of “Hey Yang, Where’s My Thousand Bucks?” click here and use the code “UBIUBI” for 25% off. For 3 months off your mobile bill with Noble Mobile, click here or email matt@noblemobile.com and use my name to switch or explore. Look up.