Should we tax AI?

The rapid ascent of artificial intelligence has significantly inflated the wealth of tech billionaires while raising concerns about widespread job displacement and economic inequality. New York State Representative Alex Bores, a computer scientist and congressional candidate, proposes an "AI dividend"—direct cash payments to citizens funded by taxing commercial AI usage. His plan includes a "token tax" on the computational units used by large language models and reducing tax deductions for businesses that replace human workers with AI. However, Martha Gimbel of the Yale Budget Lab argues that taxing inputs like tokens could inadvertently penalize beneficial research, such as cancer studies, while failing to capture profits from companies that use minimal AI to replace many workers. While Bores maintains that AI is a unique threat because it seeks to substitute rather than complement human labor, current census data indicates that 96% of businesses have not yet altered hiring practices due to the technology.