The AI Economy Act
Win the global AI race without hollowing out the American workforce, tax base, or middle class.
The first wave of AI-driven layoffs is not the crisis — it's the warning shot. Hundreds of thousands of cuts have already been announced in 2026, with AI cited as a leading driver across multiple sectors. Labor's share of value-added — what each industry actually pays the humans who make production possible — has been falling since the 1970s, and AI is about to accelerate that collapse. If we wait, displacement moves from thousands to millions, and the tax base, consumer demand, and middle-class home ownership go with it.
Win the AI race — without forcing America into permanent UBI or socialized dependency. Every industry has a 75-year track record of how much of its value-added went to the humans who made it possible. AI should not be allowed to quietly erase that. Pro-capitalism means preserving the consumers and workers capitalism depends on — and doing it through the tax code, not through Washington telling businesses how to run.
Anchor each industry to its own historical Labor Share of Value-Added — payroll divided by (revenue minus the cost of intermediate inputs) — averaged over the most recent 75 years of BLS and BEA data, using NAICS 4-digit industry codes. Industries younger than 75 years use their full available history; brand-new industries (e.g. generative AI services) use a weighted average of the three closest analog sectors for their first 10 years, then transition to their own data. Enforce through the tax code: companies below their industry's historical baseline pay a Labor Share Restoration Surcharge on the shortfall; companies at or above baseline receive a Human Employment Credit, structured like the R&D credit. No operational mandates, no criminal penalties, no wage-setting by Washington. Pair with the AGI Monitoring Commission, AI security baselines (kill switches, sandboxed execution, signed provenance, real-time anomaly detection), and retraining/apprenticeship credits. Rejects UBI as the answer.
Sponsorship of The AI Economy Act, movement into formal legislative counsel review, and bipartisan committee discussion.
Section by section
Plain-language summary of the draft. Full text is in the PDF.
Documents the 2026 layoff wave, the long-term decline in labor's share of value-added since the 1970s, the pre-AGI displacement risk, and the pro-capitalist intent to preserve human participation in the economy.
Defines Labor Share of Value-Added, Historical Baseline, Covered Industry (NAICS-4), Labor Share Restoration Surcharge, Human Employment Credit, AI-displaced role, and AGI threshold.
Each covered industry's baseline equals its average Labor Share of Value-Added — payroll ÷ (revenue − intermediate input costs) — over the most recent 75 years of BLS and BEA data, computed at the NAICS-4 level. DOL and BLS jointly maintain and publish the baselines annually.
Industries less than 75 years old use their full available history. Net-new industries with no meaningful history (e.g. generative AI services) use a weighted average of the three closest analog NAICS sectors for their first 10 years, then transition to their own data.
Employers whose labor share falls below their industry's historical baseline pay an IRS-administered surcharge on the shortfall. No operational mandate, no criminal penalty — the tax code simply stops rewarding the hollowing-out of the workforce.
Employers at or above their industry's baseline receive a Human Employment Credit, structured similarly to the R&D tax credit, claimable against federal income tax liability.
DOL, in consultation with BLS, assigns and audits NAICS-4 codes. Employers may not self-select classification. Treasury and BLS support IRS administration.
U.S. market access conditioned on a verified U.S.-employed workforce share; foreign labor arbitrage cannot be used to deflate measured labor share.
Independent commission empowered to declare AGI/ASI capability thresholds and trigger additional safeguards.
Kill switches, sandboxed execution, signed model provenance, and real-time anomaly detection for any covered AI system touching critical infrastructure, finance, or personal data.
Additional tax credit for verified retraining, apprenticeship, and human-in-the-loop role creation funded by the employer.
Annual public reporting of industry baselines and aggregate labor share trends, with safe-harbor rules for genuinely struggling firms.
Codifies congressional intent that universal basic income is not the policy response to AI displacement; human contribution remains the goal.
FAQ
Common questions and objections — answered directly.
Custom patriotic design. Not an official Congress, House, Senate, White House, Freedom 250, or America250 document. Congressional discussion draft.
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