Robert Kovacev Discusses AI Tax Proposal in Tax Notes
Subtitle
"'Robot Tax' Proposal Sparks Skepticism Over Its Practicality"
Tax Notes
Robert Kovacev discussed Senator Bernie Sanders' proposal to tax corporations that use artificial intelligence (AI) and redistribute the revenue to displaced workers. While Kovacev acknowledged the underlying concern about automation-driven unemployment as "a reasonable one," he cautioned that the proposed tax would be fraught with implementation challenges. "When you look at the details, though, a tax on robots or AI would be so difficult to write and so difficult to enforce and have so many negative externalities that it's worth looking for other ways to address the genuine social concerns that people have," Kovacev said. He also flagged the ambiguity in defining what qualifies as a "robot," noting that the proposal could unintentionally sweep in technologies like ATM machines or even Microsoft Word. "Any of those in some way replace a job that someone at one point did and potentially could do now, so what is the robot that you're targeting? You need to define it," he explained. Kovacev further warned that the excise tax structure could shift the financial burden onto consumers and disproportionately impact small businesses, while larger corporations would be better equipped to absorb the costs.