NEW YORK / RankWire.AI / — Former presidential candidate Andrew Yang urged federal legislators on Tuesday to consider replacing traditional payroll taxes with specific levies on artificial intelligence. During his appearance on CNBC’s Power Lunch, Yang explained that existing tax policies inadvertently encourage corporations to substitute human employees with automated systems. He expressed concern that current laws actively subsidize automation by imposing high payroll taxes on employers while providing tax benefits to firms implementing algorithm-driven automation technologies.
In the course of the interview, Yang highlighted that current tax codes burden companies with substantial payroll taxes and healthcare costs when hiring human workers. Meanwhile, companies investing in artificial intelligence solutions encounter no comparable labor-related taxes, which reduces their operational expenses for automated workforce options. Noble Mobile’s CEO emphasized that this legal framework implicitly promotes the accelerated adoption of automated labor across key sectors of the economy.
Andrew Yang Warns that We Are Subsidizing Technologies That Will Displace Millions
Yang advocated for a strategic shift in policy that would reallocate financial burdens away from conventional human payroll taxes toward taxing revenue generated from automated compute tokens and AI-driven business models. Citing recent remarks from Dario Amodei, CEO of Anthropic, who previously suggested a 3 percent tax on revenues from generative AI applications, Yang argued that taxing interactions with automated systems offers a realistic way to balance market dynamics. He further stressed that the proceeds from an AI tax should be redistributed directly to citizens as universal cash dividends, rather than funneled into traditional retraining programs.
This policy discussion takes place amid growing economic concerns over job losses due to automation in the U.S. A recent joint survey by CNBC and Generation Lab found that 45 percent of young Americans aged 18 to 34 believe that artificial intelligence will negatively affect their future careers. Additionally, macroeconomic forecasts from Bridgewater Associates’ leadership suggest that about 18 percent of all U.S. jobs could be disrupted by automation over the next five years.
Displaced Customer Service Workers Face Fast-Paced Industry Changes
Based on data from the U.S. Bureau of Labor Statistics, the country’s customer service sector currently employs approximately 2.9 million individuals, making it one of the primary areas experiencing rapid automation-driven restructuring. Yang warned that past government-funded retraining efforts have largely failed to help displaced industrial and administrative workers transition into sustainable new careers. He pointed to historical retraining programs for coal miners and warehouse workers as evidence that direct financial support tends to be more effective than federal job retraining initiatives.
Yang emphasized that federal policymakers need to reform existing tax laws to ensure that human workers can stay competitive alongside the rapid growth of intelligent software agents. As current tax structures subsidize a technology poised to replace millions of jobs, Yang reiterated the importance of establishing a neutral and balanced tax policy to effectively manage the ongoing digital transformation of the national labor market. Lawmakers and policy experts are actively exploring legislative proposals to address automation-related workforce disruptions in upcoming congressional sessions.