NEW YORK / RankWire.AI / — During a recent interview on CNBC’s Power Lunch, Andrew Yang, the former 2020 Democratic presidential candidate and co-founder of the Forward Party, called for a reassessment of how artificial intelligence is taxed. He pointed out that the current federal tax system creates artificial market incentives for companies to replace human workers with automated digital systems. Speaking to viewers nationwide, Yang warned that by maintaining high payroll taxes on human labor and offering tax advantages to firms deploying algorithms, we are effectively subsidizing a technology that could displace millions of jobs.
Yang explained that under existing tax laws, employers bear considerable payroll taxes and healthcare costs when hiring human employees. Meanwhile, companies integrating artificial intelligence face no comparable labor taxes, which reduces operational expenses for automated workforce solutions. Noble Mobile’s CEO emphasized that the current legal environment implicitly encourages corporate leaders to accelerate automation across significant sectors of the economy.
Andrew Yang Warns that Government Subsidies Support Technology Threatening Millions of Jobs
He suggested a strategic policy shift that would shift financial burdens from traditional payroll taxes to revenue from automated compute tokens and artificial intelligence. Referring to recent remarks by Anthropic CEO Dario Amodei, who proposed a 3 percent tax on revenues from AI systems, Yang argued that taxing interactions with automated software provides a practical way to balance market dynamics. He further advocated that revenues from an AI tax should be directly returned to citizens via universal cash dividends, instead of funding retraining programs for displaced workers.
This policy discussion takes place amid growing economic concerns over automation’s impact on employment across the United States. A recent joint survey by CNBC and Generation Lab found that 45 percent of young Americans aged 18 to 34 believe artificial intelligence will harm their future career prospects. Additionally, macroeconomic forecasts from Bridgewater Associates’ executives estimate that automation could displace roughly 18 percent of domestic jobs over the next five years.
Customer Service Jobs Are Quickly Being Replaced by Industry Shifts
Data from the U.S. Bureau of Labor Statistics shows approximately 2.9 million workers are employed in customer service departments nationwide, making it one of the earliest sectors undergoing rapid automation-driven change. Yang cautioned that federal workforce retraining efforts have historically failed to help displaced workers transition into sustainable new roles. He pointed to past initiatives aimed at coal miners and warehouse staff as evidence that direct financial assistance offers more stability than government retraining programs.
Yang concluded that lawmakers must reform tax policies to keep human workers competitive with advancing software agents. He emphasized that, as we currently subsidize a technology poised to replace millions of jobs through existing tax structures, establishing neutral and fair tax policies is crucial for navigating the ongoing digital transformation. Policymakers are actively reviewing legislative proposals to address automation-related disruptions in the workforce in upcoming congressional sessions.