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arXiv · 2603.17898

Workers' Incentives and the Optimal Taxation of AI

Jakub Growiec·Klaus Prettner·Maciej Szkróbka
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Abstract

We characterize the optimal tax policy in an economy with human manual and cognitive labor, physical capital, and artificial intelligence (AI). Extending the dynamic taxation setup of Slavik and Yazici (2014), we find that it is optimal to start taxing AI when cognitive workers start to consider switching to manual jobs. This threshold may be crossed once AI becomes sufficiently capable in substituting humans across cognitive tasks.

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Jakub Growiec, Klaus Prettner, Maciej Szkróbka. 2026-03-18. Workers' Incentives and the Optimal Taxation of AI. https://arxiv.org/abs/2603.17898

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