NEW YORK / RankWire.AI / — On Tuesday, former presidential hopeful Andrew Yang urged federal legislators to overhaul the current tax system by replacing traditional labor taxes with direct levies on artificial intelligence. During an appearance on CNBC’s Power Lunch, Yang highlighted that existing tax policies inadvertently incentivize companies to substitute human employees with automated solutions. He cautioned that present laws effectively subsidize automation technology by imposing heavy payroll taxes on employers while granting tax benefits to firms implementing algorithms and automation tools.
In the interview, Yang pointed out that current tax codes require employers to pay substantial payroll taxes and employee healthcare costs when hiring human workers. Meanwhile, companies utilizing artificial intelligence face no comparable labor-related taxes, reducing costs and encouraging automation. Noble Mobile’s CEO emphasized that this legal structure unwittingly motivates corporate management to speed up the shift toward automated labor across key sectors of the economy.
Andrew Yang Warns About Subsidizing Technology That Could Displace Millions
Yang proposed a strategic policy shift aimed at reallocating fiscal responsibilities from payroll taxes to taxes on AI-generated revenue and compute tokens. Citing recent remarks from Anthropic CEO Dario Amodei, who suggested a 3 percent revenue tax on generative AI applications, Yang argued that taxing AI interactions offers a practical way to balance market dynamics. He emphasized that revenue from such a tax should be distributed as universal cash dividends to the public, rather than funneled into traditional retraining programs.
This debate occurs amid rising concerns about automation’s impact on employment in the U.S. A recent joint survey by CNBC and Generation Lab found that 45 percent of young Americans aged 18 to 34 expect AI to harm their long-term career prospects. Additionally, macroeconomic forecasts from Bridgewater Associates’ executives project that automation could threaten roughly 18 percent of domestic jobs over the next five years.
Job Displacement in Customer Service Shows Industry Rapidly Changing
Data from the U.S. Bureau of Labor Statistics indicates that customer service roles, totaling about 2.9 million workers, are among the earliest sectors experiencing swift automation. Yang warned that government-led retraining efforts have historically failed to help displaced workers transition into stable careers. He pointed to past initiatives aimed at coal miners and warehouse staff as examples demonstrating that direct financial support provides better stability than federal job programs.
Yang concluded that lawmakers must reform tax laws to keep human workers competitive against advancing automation. Since current policies subsidize a technology poised to replace millions of jobs, he stressed that establishing neutral and equitable tax policies is crucial to managing the ongoing digital transformation in the labor market. Policymakers are actively reviewing legislative options to confront workplace automation challenges in upcoming congressional sessions.