Watchdog Warns New AI Tax Would Hurt Innovation

FOR IMMEDIATE RELEASE

Contact: Mazie Goodlett (803) 369-2181

WASHINGTON, D.C. –  This week, Senator Kelly announced he will introduce the Make AI Work for Americans Act, a bill that would impose new taxes on major AI and tech companies to fund an AI Horizon Fund that would support worker training and assistance for workers affected by AI displacement.

In response to the announcement, Angela Luna, Senior Technology Fellow of the Taxpayers Protection Alliance, offered the following statement:

“Protecting workers from changes in the workplace has taken center stage in discussions around AI, but this is the wrong way to do it. The bill tries to address potential job losses—even though broad job losses have thus far largely failed to materialize—by taxing a handful of tech companies and putting that money into a new fund. Instead of letting businesses, workers, and the market adjust to these changes, the government would be stepping in with yet another tax and another program. This approach has failed before when applied to other industries, and it will fail again here.

This misguided new tax will saddle AI companies with additional costs, which will almost certainly be passed on to consumers. The result will be increased prices for AI products and services and less money available for future investment in the industry. This money should be going toward developing new products, helping businesses grow, creating new jobs, and saving patients’ lives—not creating another failed government program.

Despite fears of job disruption, the evidence shows that recent labor shifts closely mirror past technological innovation such as the rise of the internet, with limited disruption to hiring and jobs. Recent research has also pointed to AI largely complementing human workers rather than taking their jobs. A better path forward would be to make existing job displacement programs work better instead of introducing a new program that will hold back innovation. Lawmakers should reject this tax-and-spend approach to AI and work toward a light-touch framework that promotes job creation and prosperity.”

###

The Taxpayers Protection Alliance (TPA) is a non-profit, non-partisan organization dedicated to educating the public through the research, analysis, and dissemination of information on the government’s impact on the economy.