The AI Tax and Work Protection Act would impose a levy on leading artificial intelligence developers and direct the proceeds toward a federal employment program modeled partly on the New Deal-era Works Progress Administration.
By yourNEWS Media Newsroom
Three House Democrats introduced legislation Thursday that would tax major artificial intelligence companies and use the revenue to establish a federal jobs program for workers displaced by automation.
The AI Tax and Work Protection Act, sponsored by Reps. Greg Casar, D-Texas, Valerie Foushee, D-N.C., and Sara Jacobs, D-Calif., would create a Work Protection Administration financed through a new levy on leading AI developers.
Under the proposal, a company’s tax liability would be determined by either the price of the AI tokens it sells or the revenue generated from product sales, whichever calculation produces the larger amount.
Tokens are units of data processed by AI models and are commonly used by developers to measure system usage and determine what customers pay.
The proposed rate would automatically increase when the national unemployment rate rises, tying the financial obligation imposed on AI companies to broader conditions in the labor market.
“Right now, the federal government is doing nothing to protect workers from the threat of AI mass unemployment,” Casar said in a statement. “Our bill would protect American workers by making big AI companies pay their fair share.”
Casar described the concept in May, arguing that the current tax code favors automation because employers pay payroll taxes on human wages but face no comparable charge when machines replace employees.
He said the new federal jobs program should take inspiration from the Works Progress Administration, the New Deal-era initiative that employed millions of Americans during the Great Depression on infrastructure, public service and arts projects.
The measure joins a growing number of congressional proposals addressing concerns that generative AI could eliminate existing jobs even as the technology increases productivity and creates new forms of employment.
Foushee and Casar introduced separate legislation June 24 directing the Government Accountability Office to study AI-related job gains and losses, changes in the nature of work and weaknesses in federal labor data.
A 2025 report from Foushee said employers cited AI as a contributing factor in 54,694 job losses during a year in which more than 1.1 million job cuts were announced throughout the economy.
Jacobs also joined lawmakers in June in introducing legislation that would require large companies and federal agencies to report AI-related layoffs to the Department of Labor.
Sen. Bernie Sanders, I-Vt., introduced the American AI Sovereign Wealth Fund Act on June 18, proposing a one-time 50% tax paid in company stock by qualifying AI businesses with at least $200 million in annual AI sales.
Sanders’ legislation, S. 4825, would place those shares into a federally managed fund intended to provide public benefits and give the government influence over corporate decisions.
The House bill faces significant obstacles in the Republican-controlled chamber. The official House party breakdown Thursday stood at 218 Republicans, 212 Democrats, one independent and four vacancies.
All three sponsors of the AI Tax and Work Protection Act are Democrats.
Federal employment data have not yet shown mass unemployment caused by artificial intelligence, highlighting the uncertainty surrounding predictions of widespread displacement.
The Bureau of Labor Statistics reported that the unemployment rate was 4.2% in June, when employers added 57,000 jobs.
Long-term unemployment, however, increased by 286,000 from the previous year to 1.9 million people.
The July employment report was scheduled for release Friday as lawmakers continued debating how the federal government should respond to the potential effects of rapidly advancing AI systems on American workers.
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