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Sen. Ron Wyden pushes bills to tax data centers, aid displaced workers

Jacob Fulton, CQ-Roll Call on

Published in News & Features

WASHINGTON — Senate Finance ranking Democrat Ron Wyden of Oregon released the text of a pair of bills Friday aimed at blunting the impact of artificial intelligence on the American workforce — an early signal of potential Democratic priorities if the party regains control of the Senate.

One bill, dubbed the Stability and Opportunity for Workers Act, would create an income support program lasting up to two years for workers as they retrain for employment and would expand unemployment insurance in anticipation of job losses due to AI disruption. It would create a pilot program for tuition assistance for workers in job training programs, and it would update the federal-state Extended Benefits program to allow for up to 52 additional weeks of unemployment insurance benefits, according to a bill summary.

The other bill, which Wyden has been discussing for months, would implement an excise tax on data center operators and would exclude data centers from a number of tax breaks. Data centers would be barred from tapping into a research credit for equipment expenses and 100 percent bonus depreciation, and they would not be allowed to qualify for so-called Opportunity Zone business breaks, according to a summary.

The effort comes as lawmakers are grappling with the best ways to regulate and tax artificial intelligence companies amid an industry-wide boom that has the potential to reshape the American workforce. A number of Democrats have already come out in favor of various avenues to levy taxes against AI, and some populist Republicans are also raising concerns about the technology and have expressed interest in further guardrails.

Wyden is also unveiling the bills just days before the midterm elections, where the balance of power in the 120th Congress will be decided.

Democrats are hoping to take back both the House and the Senate, partly by seizing on the rising national concern about the economic impact of artificial intelligence. Wyden, in a statement, described his proposals as “a needed first step to give families the wage security they deserve in this time of high costs and economic uncertainty.”

However, not all lawmakers see these kinds of guardrails as the right path forward as Congress wrangles with potential actions on artificial intelligence. Some opponents see these proposals as hurdles to growth for artificial intelligence companies and, therefore, the overall American economy.

 

“If you start to tax it, you slow it down, and it goes elsewhere, or it does not move as fast as it will in other parts of the world. That’s not good for America,” Sen. Mike Rounds, a South Dakota Republican and co-chair of the Senate Artificial Intelligence Caucus, said in June. “I’d rather have those decisions being made here at the forefront rather than in China.”

The White House is also charting its own path forward on artificial intelligence, with actions ranging from one order in late September requiring all agencies to refer to AI as “super intelligence,” to another proposal from March outlining a framework for a national AI policy that broadly preempts state laws.

Still, Democrats are likely to use whatever leverage they have in the new Congress to push for broader guardrails on AI, whether through taxes or other regulatory frameworks.

“Americans feel the looming fear of AI job losses, and Congress has a responsibility to help the country prepare,” Wyden said in his statement. “The support meant to protect workers from financial devastation when they lose their jobs is brittle and out of date, and needs to be updated before the next economic crisis.”

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