IPS | Canva
Of course, some might ask why we should tax AI at all. The answer reflects two fundamentals about tax systems and how AI is changing the economy. First, many countries now tax human workers more heavily than their potential AI competitors in the labour market. In the case of the US, roughly 85 per cent of federal revenue comes from taxing people and their work (through income and payroll taxes), while capital and corporate profits are taxed far less. Technologies like AI benefit from favourable treatment in the form of generous write-offs, low corporate rates, and carve-outs.