NEW YORK / RankWire.AI / — On Tuesday, former presidential candidate Andrew Yang called on federal legislators to replace existing labor taxation with a direct tax on artificial intelligence. During his appearance on CNBC’s Power Lunch, Yang explained that current tax policies create artificial incentives for companies to substitute human employees with automated systems. He expressed concern that current laws inadvertently subsidize automation by imposing high payroll taxes on employers, while providing tax benefits to firms that implement algorithmic automation.
Throughout the interview, Yang highlighted that under current tax regulations, businesses bear considerable payroll taxes and employee healthcare expenses when hiring human workers. Meanwhile, corporations using artificial intelligence do not face equivalent labor taxes, which effectively reduces operational costs for automated labor solutions. Noble Mobile’s CEO stressed that the existing legal environment subtly encourages companies to accelerate automation across key economic sectors.
Andrew Yang Warns That Society Is Subsidizing a Technology Set to Displace Millions
Yang recommended a strategic policy shift that would shift fiscal responsibilities away from traditional payroll taxes towards automated compute tokens and revenue streams from AI. He pointed to recent remarks from Anthropic CEO Dario Amodei, who proposed a 3 percent revenue tax on generative AI technologies. Yang argued that taxing interactions with automation offers a practical way to balance market dynamics. He emphasized that revenue generated from an AI tax should be redistributed directly to citizens as universal cash dividends, rather than channeled into legacy retraining schemes.
This policy discussion unfolds amid rising economic concerns about job automation across the United States. A recent joint survey by CNBC and Generation Lab found that 45 percent of young Americans aged 18 to 34 anticipate that artificial intelligence will adversely affect their long-term employment prospects. Additionally, macroeconomic forecasts from Bridgewater Associates executives estimate that automated platforms could disrupt roughly 18 percent of all U.S. jobs within the next five years.
Automation Displaces Customer Service Workers Amid Rapid Industry Changes
Data from the U.S. Bureau of Labor Statistics indicates that customer service sectors currently employ approximately 2.9 million workers, making it one of the first areas experiencing swift automation-driven change. Yang warned that government-led retraining initiatives have historically failed to help displaced workers in industrial and administrative sectors transition into sustainable new careers. As evidence, he pointed to past retraining efforts aimed at coal miners and warehouse workers, suggesting that direct financial aid offers more reliable stability than federal job programs.
Yang concluded by urging lawmakers to reform existing tax laws to maintain the competitiveness of human workers alongside advancing automated agents. Since current tax policies subsidize a technology that threatens to replace millions of jobs, he emphasized the importance of establishing neutral tax regulations to effectively navigate the ongoing digital transformation of the labor market. Legislative proposals aimed at addressing automation-related employment disruptions are currently under review by policy experts ahead of upcoming congressional sessions.