AI has entered the workforce: tax tech profits, not people

If artificial intelligence and automation begin to replace human labour at scale, the key economic question won’t be the speed at which jobs vanish — it will be who pays the bill. As machines generate an ever-larger share of economic value, governments will be forced to confront how to fund retraining and unemployment support in a world in which fewer people are needed to produce more wealth. AI can supercharge inequality — unless the public learns to control it Two priorities stand out as governments start preparing for an AI-driven shift: widening the tax base beyond labour and strengthening the institutions that help workers to adapt to technological change. Currently, in most countries that belong to the Organisation for Economic Co-operation and Development (OECD), labour is heavily taxed: income tax and social-security contributions make up about one-third of employment costs and generate almost half of tax revenues (see go.nature.com/4ogzsr4 ). Technology, by contrast, is lightly taxed — and frequently subsidized — to promote its adoption and competitiveness. Proposals to tax technology, such as a ‘robot tax’ that targets the ownership or operation of robotic equipment, have struggled to gain political support. If automation displaces millions of workers, a fiscal system that has been built to tax people, not machines, will be exposed. Public revenues will shrink just as demand for retraining and welfare spending rises. …