A ‘Robot Tax’ for America? What the Midterms Mean for AI and Jobs

A ‘Robot Tax’ for America? What the Midterms Mean for AI and Jobs

A Senate report says nearly 100 million US jobs could be automated within a decade. The robot tax is still only a proposal. Whatever happens tonight, companies should start preparing for the questions it raises.

Of the five topics in this series, this is the one most likely to reach ordinary households, and the one where the two parties are furthest apart.

In October 2025, Democratic staff on the Senate HELP Committee, under Senator Bernie Sanders, released a report estimating that AI and robotics could replace close to 100 million American jobs over the next decade. They looked at 20 major occupational sectors and concluded that in 15 of them, more than half of positions could be automated.

Economists have challenged the methodology, and they’re right to. Estimating which tasks can be automated is very different from predicting which jobs will disappear. I’ve seen enough “AI will replace X” forecasts come and go to treat any single number carefully. Still, even if the true figure turns out to be a fraction of that, the fiscal problem the report points to is real, and that’s the part I want to focus on.

How AI changes work will be decided by policy choices, not by the technology alone.

Who is most exposed

According to the report, exposure is highest in routine service work and administrative support. It goes well beyond entry-level jobs.

The last two rows get less attention than they deserve. Freight handling and executive support have long been stable routes into the middle class. When those disappear, the effect on a community isn’t the same as losing a cashier job.

The fiscal problem underneath

Here’s the part that I think gets overlooked. The US funds Social Security, Medicare and unemployment insurance mainly through payroll taxes, which means taxes on wages. When a worker is replaced by software, the productivity gain shows up as corporate profit, which is taxed differently, and often taxed less. The safety net shrinks just when more people may need it.

The robot tax is a response to that gap. As the HELP report describes it, a company that replaces a human position with AI or robotics would pay a levy tied to that position, and the money would go to two places: replacing lost payroll tax revenue, and paying for retraining and transition support for displaced workers. Bill Gates made a similar argument years ago, saying companies benefiting from automation should “pay their fair share.”

The report places the robot tax inside a broader labor agenda: a 32-hour workweek with no cut in pay, a $17 federal minimum wage, stronger overtime protections, and worker equity stakes in automated industries.

To be clear, none of this is law, and the robot tax hasn’t been introduced as a bill. It’s a proposal, and it’s what one side would bring to the table if it gains leverage.

How the two sides see it

Supporters, mostly Democrats and labor-aligned groups, argue that the pace of automation is a policy choice, not a law of nature. In their view, an economy where companies capture the productivity gains while workers absorb all the displacement isn’t sustainable. They see the robot tax as a way to share the gains and protect the safety net.

Opponents, mostly Republicans and many economists, argue that taxing automation is taxing productivity. They point out that “a job replaced by AI” is very hard to define in practice. Is it a role that was never filled? A team that got smaller through attrition? They also warn that such a levy would push investment overseas and weaken America’s position against China at a critical moment.

Both arguments have real substance. I’d also note that neither side has a convincing answer to the payroll-tax gap yet. That gap will remain whichever party wins tonight.

What this means for Taiwan

Taiwan faces a quieter version of the same equation. Our Labor Insurance and National Health Insurance systems are also mainly wage-funded, and our working-age population is shrinking. The irony is that automation is often presented in Taiwan as the solution to labor shortages, which it partly is. But a smaller wage base paying for an aging society is a problem we’ll have to face sooner than the US.

How AI changes work will be decided by policy choices, not by the technology alone. The midterms are one of the first places those choices get made.

Discussion question: Should Taiwan begin studying how to fund social insurance in an economy where more and more value is produced without wages?

Series note: this post concludes “AI on the Ballot,” written on US Election Day. A follow-up will look at what the results actually changed.

James Chiao (焦國安) is the Founder of iTAC and President of the Taiwan Smart Solutions Association (TSSA), a 340-member ecosystem spanning 27 smart solution domains. He advises international development institutions and has worked on smart city and digital transformation projects across Taiwan, Europe, Southeast Asia, the US and China.  

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