AI Tax and Work Protection Act

The "AI Tax and Work Protection Act" establishes a new federal framework to address the economic impacts of artificial intelligence on the workforce. It imposes an excise tax on the usage of artificial intelligence foundation models , specifically targeting "covered transactions" such as providing access to these models or using them in ways that lead to workforce reduction. The tax rate is variable, increasing with higher national unemployment rates, and includes exemptions for research and development by public and non-profit entities. Revenue from this tax will be deposited into a newly established trust fund , starting in fiscal year 2027. These funds are dedicated to supporting a new Work Protection Administration (WPA) within the Department of Labor. The WPA's primary role is to develop and implement a comprehensive jobs program. This program will award competitive grants to eligible entities, including state and local governments, educational institutions, and non-profits, to create employment opportunities . Priority will be given to jobs that are permanent and full-time, and those typically performed by state or local governments. Grant recipients must adhere to strict labor standards, including providing prevailing wages, comprehensive health benefits, paid family and medical leave, and paid sick leave. Furthermore, the bill mandates policies that protect employees' collective bargaining rights and prevent the displacement of existing workers. The types of jobs created are diverse, spanning critical public needs such as child care and education health initiatives elder care housing support public infrastructure environmental conservation and local news and journalism . An advisory committee, comprising government officials, union representatives, and economists, will guide the WPA in implementing the grant program. Finally, the bill authorizes the Bureau of Labor Statistics to collect and report on the broader impacts of artificial intelligence on the workforce, beyond just job displacement, with dedicated funding. Up to 20% of the trust fund can also be allocated to programs and training activities under the Workforce Innovation and Opportunity Act.