Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296173 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11084
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper examines the implications of Artificial Intelligence (AI) and automation for the taxation of labor and capital in advanced economies. It synthesizes empirical evidence on worker displacement, productivity, and income inequality, as well as theoretical frameworks for optimal taxation. Implications for tax policy are discussed, focusing on the level of capital taxes and the progressivity of labor taxes. While there may be a need to adjust the level of capital taxes and the structure of labor income taxation, there are potential drawbacks of overly progressive taxation and universal basic income schemes that could undermine work incentives, economic growth, and long-term household welfare. Some of the challenges posed by AI and automation may also be better addressed through regulatory measures rather than tax policy.
Subjects: 
AI
automation
inequality
labor share
optimal taxation
tax progressivity
JEL: 
H21
H30
O33
Document Type: 
Working Paper
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