ByHoward Gleckman,
Senior Contributor.
“There is only one way to make everyone wealthy–and that’s AI and robotics. My prediction is that work will be optional." - Elon Musk
Muskian hyperbole aside, AI and related technologies such as robots and quantum computing could have a profound effect on human labor. And if machines broadly replace workers, as Musk and many others believe, this transformation poses an existential threat to the US tax system, which is largely built on taxing labor income.
Depending on how you count, between 65% and 83% of federal tax revenue is collected on wages and salaries. To the degree that tech replaces workers, taxes on labor income may decline. And, with the federal government running a nearly $2 trillion annual budget deficit, losing even fraction of those labor-related tax revenues would be a fiscal disaster.
