The Case for U.S. ABF Production: A Key Semiconductor Supply Chain Gap

How should tax policy evolve to handle transformative AI? Assuming significant labor-displacement leading to a declining labor-share and subsequent tax-base erosion, current taxation strategies that rely primarily on labor income may not suffice. Much of the profits realised through increases in productivity gains are likely to accrue to capital, meaning current policies that incentivize automation may no longer be efficient. We’re evaluating existing and proposed taxation strategies in the context of transformative AI to produce a taxonomy of options for policymakers.