Andrew Yang wants to tax AI instead of workers

Taxes exist to discourage things society wants less of. So why are we still taxing human labor while giving AI a free pass?

That was the core question from former presidential candidate and Forward Party founder Andrew Yang during an appearance on CNBC's Squawk Box on Wednesday. Yang argued that as artificial intelligence rapidly reshuffles the job market, the US needs to stop taxing workers and start taxing the AI companies driving automation.

Yang warned that the implicit social contract holding the American economy together is fracturing, and the pace of the disruption is about to hit hyperdrive.

Six months to eclipse a decade

Yang just returned from an AI conference out west, and what he heard rattled him. Insiders told him the progress coming over the next six months will eclipse everything seen over the last ten years combined.

Money is already moving fast. Yang pointed to an unnamed enterprise startup selling autonomous coding software that grew its revenue 100-fold over the past twelve months alone.

That budget has to come from somewhere, and Yang says it is directly cannibalizing money that used to fund human software engineers. Just this week, enterprise giant Atlassian cut 1,600 jobs, with its CEO explicitly framing the layoffs as a restructuring for the AI era.

Yang was blunt about what this means for ordinary workers: there is zero chance this transition will be smooth for millions of people.

Tech billionaires and Washington unite

Surprisingly, calls to tax the machines are no longer fringe political talk. Even AI founders are asking for it.

Yang highlighted Anthropic CEO Dario Amodei, who warned last year that AI could automate up to 50% of entry-level white-collar jobs within five years. In that same breath, Amodei suggested that AI firms like his own should face targeted taxes.

Tech leaders see the writing on the wall, Yang noted, recognizing that an enormous public backlash is brewing if companies reap trillions while leaving hollowed-out labor markets behind.

They have unlikely company. Last month, billionaire venture capitalist Vinod Khosla argued on X that if AI erases millions of jobs, the US should consider eliminating income taxes for most citizens and shift the burden entirely onto capital. And last October, Senator Bernie Sanders released a formal report calling for a dedicated robot tax on companies replacing human staff with automation.

Why it matters

The current tax code creates a perverse incentive: hiring a human comes with payroll taxes, healthcare, and regulatory overhead, while deploying an AI agent is a tax-deductible software expense. As autonomous agents become capable enough to handle complex office work, that gap makes replacing junior talent an irresistible corporate arbitrage.

We think Yang is right to sound the alarm on the tax imbalance, but taxing AI will be an absolute nightmare to implement. Defining what qualifies as an AI tax is notoriously difficult. Do you tax compute clusters, API consumption, or revenue derived from automation? Poorly designed rules could easily stifle early-stage builders while enterprise giants absorb the cost.

At the same time, top tech CEOs volunteering to be taxed looks less like altruism and more like pre-emptive defense. Offering up a fraction of runaway software margins is a small price to pay if it keeps harsher regulations or antitrust breakups off the table.

For workers, this debate confirms that entry-level office work is firmly in the crosshairs. Waiting for Washington to overhaul the tax code will not save vulnerable roles. The smartest move right now is learning how to run these autonomous tools rather than competing with them on routine tasks.