token tax

A token tax is the idea of taxing tokens, the units AI systems consume every time they do a task. Think of it like taxing a factory when it brings in a machine to replace workers, so the cost gap between using a human and using a machine shrinks.

Bill Gates raised this idea for a simple reason: past waves of technology created more jobs than they destroyed, but this time AI is spreading across many industries at once, leaving no other industry left to absorb the displaced workers. So the proposal is to make using AI not automatically cheaper, and use the tax revenue to support people who lose their jobs.

Gates compared it to taxes on alcohol or tobacco, giving an example where the government might take roughly half of token sales revenue. This isn't a tax actually in effect anywhere yet—it's still just a proposal under discussion.

The article reports that Gates's proposed answer is "the token tax," citing his example of the government taking "50% of token sales revenue." It's easy to misread this as a tax already adopted somewhere, but it's actually a policy idea Gates has proposed. The article notes that the idea has reportedly started being discussed on Wall Street as well.