A ‘compute tax’ is the wrong answer for the future of artificial intelligence and work
A ‘compute tax’ is the wrong answer for the future of artificial intelligence and work
Publish Date: 2026-06-02 06:30:00
Source Domain: reason.org
The rapid rise of artificial intelligence (AI) is opening a world of possibilities through innovation and gains to human productivity, but any technology with such potential will also bring disruptions to our economy and society. As these changes begin to reveal themselves, some are asking whether our tax system will need to adapt to fit a future in which AI might contribute more labor than human beings. One proposal gaining traction in some quarters is a “compute tax” assessed on every unit of the computation and data processing that powers AI and robotics.
Supporters of a compute tax fall into two broad categories. First are those who believe our future with AI will bring massive job loss and other societal disruptions, changes they hope to slow down by deliberately raising the cost of computing. The second group sees a compute tax instead as a long-term structural adjustment needed to maintain fiscal health in an economy far less based on human labor than it is today, with some going further to advocate a compute tax-funded universal basic income.
Both groups have valid concerns about the role AI will play in our future, and these concerns may indeed warrant changes to our tax system down the road. Underlying both arguments, however, are oversimplified and overconfident predictions about decades of technological change and its consequences today.
What is a compute tax?
Anton Korinek and Lee Lockwood, researchers at the Brookings Institution, recently published a review of different ways AI might be taxed as it becomes a larger part of the economy. They make an important distinction between taxes applied only to the final users of AI content or services and taxes on the computing resources or equipment itself. The proposal that has recently gained traction in public debates (including an article in the Wall Street Journal) is of the second type and would be a major departure for the U.S. tax system.
A direct tax on computing…
