"I think the problem is that a good portion of government revenue is generated by taxing work through income taxes.

If the work is done by an AI agent revenue is harder to capture.

Moving away from a tax on work is probably required at some point if agentic work starts to become more prevalent."

In the nineteenth century, the federal government was supported by almost entirely by tariffs. Chester A. Arthur, an agent of the New York political machine run by Roscoe Conklin, served as the Collector of the Port of New York from 1871 to 1878, which collected 75% of the federal government's revenues, and was a notorious source of graft, etc. There was no income tax; it was considered immoral and too hard to collect.

It's not difficult to collect taxes on digital activities, especially when they run through a blockchain. The AI companies charge for AI using "tokens", which are essentially units of value based on the resources used. Some companies are now freaking out at how many tokens their workers are consuming and how much their AI usage is costing, and are trying to figure out how to reduce that cost.

However, (a) the current crop of regulators doesn't know how to implement such a system, (b) most members of Congress would not understand it, and (c) there is no constituency calling for it. It's also much harder to cheat a digital system. So nothing happens. Maybe a good thing, I dunno.

Also, we may need a national digital currency to make a digital tax system work, and that will also be controversial.

I agree changes are needed, but IMHO it will be the next generation who makes them. Onward!

abromber