Kenneth Glad
The prospect of widespread job displacement is now colliding with a bigger issue: How governments will sustain tax revenues if fewer people are earning traditional paychecks.
Artificial intelligence is turning up in everyday workplaces, not just in Silicon Valley demos. Software now drafts routine reports, screens résumés and processes insurance claims. In some companies, junior staff are finding that the entry-level tasks they once handled are increasingly automated.
The broader labor picture is shifting. The World Economic Forum’s Future of Jobs Report 2025 estimates that 92 million roles worldwide could be displaced by 2030. In the U.S., Challenger, Gray and Christmas said more than 50,000 job cuts in 2025 were linked to AI, after 20,000 across 2023 and 2024.
In a New York Times opinion piece, LinkedIn chief economic officer Aneesh Raman wrote that AI is erasing the “bottom rungs of the career ladder,” reducing entry-level hiring and tightening opportunities for recent graduates.
A sweeping proposal
Amid those warnings, billionaire investor Vinod Khosla, writes Forbes, has suggested the tax code may need to adapt. Khosla wrote on X that the AI boom will require a “rethink of capitalism and equity,” proposing higher capital gains taxes so the government could remove “the bottom 125 million taxpayers from the tax rolls.”
Click to display external content from t.co,
- You can always enable and disable third-party content.
You agree to display external third-party content. Personal data may be sent to the provider of the content and other third-party services.
Read more about in our Privacy statement
That’s a staggering shift — and one that would upend decades of tax policy.
According to recent U.S. Treasury data, individual income taxes have accounted for roughly half of federal revenue in recent years. Capital gains taxes contribute far less and fluctuate with Wall Street performance. Shifting the burden toward investment income would mean relying more heavily on markets that can swing sharply from year to year.
Capital gains rates have long been politically contentious. Lawmakers sparred over them during the 2017 tax overhaul, and proposals to raise them resurfaced during recent budget negotiations and election-year debates. Any major increase would likely face resistance not only in Congress but from investor groups and business lobbies.
Khosla also called for ending tax-free borrowing against unrealized gains, a strategy that allows wealthy investors to tap asset value without triggering a taxable sale.
Work and wealth
Earlier Khosla has predicted that up to 80% of jobs could eventually be automated and suggested universal basic income might be required. His firm has pointed to AI systems taking on work in large employment categories such as administrative support, financial operations and healthcare management — sectors that together employ tens of millions of Americans.
Researchers say the disruption could widen existing divides. The Brookings Institution has warned that many middle-wage occupations are highly exposed to automation, while a United Nations report titled “The Next Great Divergence” cautioned that countries lacking reliable digital infrastructure may struggle to keep up.
The debate feels familiar in some ways. The U.S. has navigated industrialization, automation in manufacturing and the offshoring wave tied to globalization. Each period forced adjustments in labor markets and tax policy.
This time, the shift may reach further into white-collar work. And it may unfold faster than lawmakers are used to handling.
Sources: Forbes, World Economic Forum, The New York Times, Challenger, Gray and Christmas, Brookings Institution, United Nations
