Elizabeth Warren Calls for New Tax To ‘Benefit All Americans'

Democratic Senator Elizabeth Warren is calling for changes to the U.S. tax system, arguing that artificial intelligence is reshaping the economy in ways that could deepen inequality unless policymakers act.

In a Time op-ed published Wednesday, Warren proposed new taxes targeting AI companies, particularly the large data centers that power AI systems, alongside changes to corporate taxation and wealth policy. Warren said the current tax structure is ill-suited to an economy increasingly reliant on AI, arguing that it can discourage hiring while encouraging investment in technology.

Warren’s Proposal

In her op-ed, Warren argued that “taxing AI is one way we make sure the winnings from AI benefit all Americans, rather than channeling them only to the wealthy few.” The Massachusetts Democrat described AI as a technology with the potential to significantly concentrate wealth unless it is regulated and taxed.

“Americans are hanging on by their fingernails in an economy that funnels wealth to the ultra-rich and leaves crumbs for working people. AI threatens to supercharge this divide: tech executives have warned that AI could lead to ‘a level of wealth concentration that will break society’ and create a ‘permanent underclass,’" she wrote.

Warren also pointed to job losses and restructuring in parts of the economy as companies adopt AI tools, alongside the emergence of new technology-driven fortunes.

"AI data centers are jacking up utility bills; for families living near large data centers, electricity costs have skyrocketed by as much as 267% over the past five years," she wrote, adding that "Americans are showing up at town meetings to protest data centers and communities across the country are fighting for data center moratoriums."

Warren also referenced warnings from technology executives about the future scale of automation.

"Big Tech CEOs say this is only the beginning, predicting that AI will soon automate most white-collar tasks," she wrote, noting that such claims may be overstated. She added that changes in employment could have wider knock-on effects, particularly in the United States, where health insurance is often tied to jobs.

"Right now, companies pay payroll taxes for their workers but get tax breaks for investing in technology-effectively, a tax penalty for hiring human beings and a tax break for buying equipment," she wrote.

She said such a dynamic risks encouraging firms to replace workers with automation and argued that the system should be adjusted to "level the playing field" through higher corporate taxes, tighter enforcement of loopholes, and changes to capital taxation.

Wealth Tax

The senator also called for a wealth tax, arguing that some of the largest fortunes generated in the tech sector are taxed at lower effective rates than those of ordinary workers.

"Some of the wealthiest individuals in America get away with paying lower tax rates than a Boston public school teacher because our system taxes income but not wealth," she wrote.

"If it wasn't clear before, there's no question in a world of AI: we need a wealth tax. Jeff Bezos and Sam Altman shouldn't pay lower tax rates than the workers they fire."

Warren further proposed targeting AI firms directly through infrastructure taxes, particularly on data centers.

"The majority of AI data centers are controlled or operated by trillion-dollar companies," she wrote. "By imposing a reasonable excise tax on the energy used by data centers, families could recoup some of the gains of AI…A well-designed tax would focus on the companies that can afford it and scale with AI's impact: the bigger the data center, the more they pay."

"AI was trained on human creativity and intelligence, AI was funded in part by federal investments in scientific research, and AI is powered by data centers that are built on American land and use our shared electric grid," she wrote.

"The American people deserve to share in the success of this technology. And I'm willing to work with anyone to get it done."

AI Taxation in America

Warren's proposal comes as economists and policymakers continue to debate how tax systems should adapt to automation and AI-driven productivity gains. Independent Senator Bernie Sanders and Democratic Senator Mark Kelly have each supported proposals for taxing AI, as has Dario Amodei, the CEO of Anthropic, one of the leading AI research labs.

A January Brookings Institution report on taxation in the age of AI notes that governments are "grappling with how to adapt systems of taxation and public finance for an automated future." It warns that AI could weaken traditional tax bases by reducing reliance on human labor and cautions that poorly designed reforms could slow innovation.

"Yet without a coherent framework for evaluating these options, we risk implementing policies that could hinder innovation and undermine competitiveness while failing to address the fundamental fiscal challenges ahead," the report states.

It adds that "smart AI taxation requires distinguishing final services from productive capital investments," and suggests that shifting toward consumption-based taxation could help governments raise revenue without discouraging innovation.

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This story was originally published May 28, 2026 at 11:58 AM.