If AI really changes the economy, who pays for the disruption?

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**Kimberly Adams** (0:31)
If AI really changes the economy and the labor force, who pays for the disruption?
From Marketplace in Washington, I'm Kimberly Adams. Artificial intelligence is already shifting how many of us live and work. And if the tech titans of our era have their way, we're just getting going on a path of massive economic transition. We've been hearing from experts all week about how America's system of taxation may need an overhaul if AI takes over an increasing number of human jobs. If people lose jobs, they don't earn wages. If they don't earn wages, they don't pay taxes on wages. And our tax system is based on taxing human labor. In response, some experts say we have to get creative. But some ideas can be too creative, as Marketplace's Future Effects correspondent, David Brancaccio, reports.

**David Brancaccio** (1:22)
Here's an idea out of the Windy City to raise money when tax revenue crashes. During the Great Recession of 2008, Chicago decided to milk its parking meters.

**Henry Grubar** (1:33)
And so the idea that that $20 million annual revenue for meters could be turned into all of a sudden more than a billion dollars struck many people as almost an act of financial alchemy.

**David Brancaccio** (1:46)
Henry Grubar is author of Paved Paradise, How Parking Explains the World. In late 2008, when the financial world was unraveling, Chicago opted to sell its parking meter rights to a consortium of investors put together by Wall Street called Chicago Parking Meters, LLC.
It was a deal to last 75 years.

**Henry Grubar** (2:08)
Money now is very attractive and politically is more popular than money later.

**David Brancaccio** (2:15)
Popular until the new private owners did just what you'd think. They jacked up the rates for parking in Chicago.

**Henry Grubar** (2:22)
Parking is something that people dealt with every day. I think that's one of the reasons that this immediately hit a nerve.

**David Brancaccio** (2:28)
Eighteen years on and Chicago is having trouble buying the meters back. If now is the time to rethink our tax system for the AI era, the parking gambit reminds us to watch out for unintended consequences. Chicago tried turning something public into something private.
Some Silicon Valley luminaries are now interested in a strategy that goes the other way, making private assets public. It's about the government getting a bunch of AI companies' stock to build a potentially huge public investment fund. If AI profits shoot up, the fund would generate piles of money. Here's noted venture capitalist Vinod Khosla at last year's TechCrunch Disrupt Conference, saying an AI sovereign wealth fund might be just the ticket.

**Vinod Khosla** (3:12)
I'll get critique for this idea. But sharing the wealth of AI is a really, really big need to level the benefits to everybody. But we won't need to do it in 15 years, but we do have to take care of those people.

**David Brancaccio** (3:29)
Sixty-nine percent of US workers support this idea of putting half the stock of AI firms into a fund to benefit society, according to the research firm VeriCite. Senator Bernie Sanders likes this as well. President Trump has spoken of AI giving back, quote, if we do that, the public will become very rich.
Tech companies may be worried about how to pay to help people navigate AI disruption, but there may be other motives. Nobel laureate and Columbia economist Joseph Stiglitz is skeptical of this approach.

**Joseph Stiglitz** (4:01)
Once the government is the partial owner of AI, their pressure will be on not to regulate. They'll say, oh, regulation will take away our profits. And so they're trying to get the government into the mindset of an owner.

**David Brancaccio** (4:18)
Critics say that's what they're seeing with Norway's massive sovereign wealth fund built out of its oil and gas profits. Despite Norway's green talk, an analysis by an environmental group finds Norway is still into fossil fuel exploration.
Some experts I spoke with propose a more straightforward approach if robots eat our taxes. Instead of a government fund full of AI stock, why not instead redouble efforts to tax corporate profits, any profits? Bruce Schneier at Harvard's Kennedy School is author of Rewiring Democracy, How AI. Will Transform Our Politics, Government and Citizenship.