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AI, Automation, and Taxation

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Abstract

This chapter examines the implications of Artificial Intelligence (AI) and automation for the taxation of labor and capital in advanced economies. It synthesizes empirical evidence on worker displacement, productivity, and income inequality, as well as theoretical frameworks for optimal taxation. Implications for tax policy are discussed, focusing on the level of capital taxes and the progressivity of labor taxes. While there may be a need to adjust the level of capital taxes and the structure of labor income taxation, there are potential drawbacks of overly progressive taxation and universal basic income schemes that could undermine work incentives, economic growth, and long-term household welfare.

Suggested Citation

  • Bastani, Spencer & Waldenström, Daniel, 2024. "AI, Automation, and Taxation," Working Paper Series 1501, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:1501
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    Cited by:

    1. Anna Fedyunina & Liudmila Ruzhanskaya & Yuri Simachev, 2025. "Global Imperative, Local Realities: Unveiling Drivers of Industrial Robotization in Russian Manufacturing," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(3), pages 11063-11095, September.
    2. Minniti, Antonio & Prettner, Klaus & Venturini, Francesco, 2024. "Unslicing the pie: AI innovation and the labor share in European regions," Department of Economics Working Paper Series 369, WU Vienna University of Economics and Business.
    3. Minniti, Antonio & Prettner, Klaus & Venturini, Francesco, 2025. "AI innovation and the labor share in European regions," European Economic Review, Elsevier, vol. 177(C).
    4. Ranaldi, Marco, 2024. "Compositional Inequality: Measurement, Stylized Facts, and Normative Aspects," SocArXiv 75ghp, Center for Open Science.
    5. repec:osf:socarx:75ghp_v2 is not listed on IDEAS

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    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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