world-economy

Governments Grapple With Tax Models as AI Disruption Looms

Policymakers are rethinking how to fund public services as artificial intelligence threatens traditional revenue streams. For decades, wealthy nations have relied on taxes from workers and consumers to finance government operations. That approach may collapse if AI advances rapidly and displaces significant employment. Mass joblessness from automation would shrink the tax base while straining social services. Government officials are exploring alternative funding models that shift revenue collection toward the technology itself rather than wages and purchases. Some economists argue this shift is inevitable if AI delivers on its promised productivity gains. The challenge lies in designing policies that capture wealth generated by new technology while maintaining adequate revenue for public programs and worker support systems.