August 07, 2026

As AI companies threaten Great-Depression levels of mass unemployment, Jacobs, Casar, Foushee would tax companies to pay for jobs

Rep. Sara Jacobs (D-CA), Rep. Greg Casar (D-TX), and Rep. Valerie Foushee (D-NC) introduced a new bill to protect American workers from the threat of mass unemployment caused by AI.

The AI Tax and Work Protection Act would tax large AI companies to pay for a new Work Protection Administration, which would create jobs to offset AI layoffs. By imposing a tax on AI, the bill would also save jobs by helping to cancel out the tax break that big companies currently get when they automate away a job.

The bill comes amid growing concern about AI eliminating millions of American jobs. Anthropic CEO Dario Amodei has predicted AI could lead to unemployment levels not seen since the Great Depression, and AI-precipitated layoffs have already occurred at major tech companies, law firms, and banks.

The bill would:

  1. Tax big AI companies. Companies pay a tax calculated on the higher of two values: the value of the ‘tokens’ they sell or the revenue they generate selling AI products. In the case of open-weight models, the tax is paid by the company deploying the model if that model is used by the company to reduce workforce costs.

  2. Create a new Work Protection Administration, paid for by the AI tax revenue. The program would create jobs by investing in things like building housing, modernizing infrastructure, and improving access to child care and elder care. Grants would be given to states, cities, tribes, localities, nonprofits, unions, and educational institutions.

  3. Increase the AI tax rate if the unemployment rate rises, so the program can grow if the need for jobs grows.

“If Congress does nothing, the rise of AI could create the biggest wealth transfer in history from the bottom to the top,” said Jacobs. “Corporations are already laying off workers and raking in the profits from AI systems trained on human work – without ensuring workers share in those gains. That’s why Congress needs to act now by preparing the economy for AI, creating guardrails so it augments workers instead of replacing them, and strengthening the social safety net. The AI Tax and Work Protection Act will tax certain uses of AI, especially when they lead to job cuts, and it will help create jobs for workers who may be left behind by the AI transition. If AI profits off human work, workers deserve job security and a share of those profits.”

“This bill says: we will not let AI billionaires get rich by putting you out of work,” said Casar. “Right now, the path we are on is clear: AI will turn a couple of billionaires into trillionaires but leave millions without work. That is unacceptable. And right now, the federal government is doing nothing to protect workers from the threat of AI mass unemployment. Our bill would protect American workers by making big AI companies pay their fair share.”

“The rise of new technologies should be used to bring benefits to consumers and hardworking Americans. But as artificial intelligence continues to reshape our economy, too many workers are already losing jobs while executives and investors line their pockets,” said Foushee. “Congress has a duty to ensure that this technology is not used to deepen wealth inequality, but instead that the economic benefits of AI are shared with working people. As a proud member of the Congressional Progressive Caucus, I am grateful to have worked with Chair Casar on this critical piece of legislation, which will tax tokens used by large AI companies to fund public employment programs, protect workers from AI-driven job loss, and keep our country moving forward in every sector.”