Tax Policy in the Age of Advanced Artificial Intelligence

Technical advancements, booming investments, the changing labour market, rapid deployment by organizations and government initiatives all point towards an exponential and transformational growth of artificial intelligence (AI). Hypothesizing the macroeconomic implications of an advanced AI world, one can imagine, on the one hand, an overall revamp of production factors, exploding output and developments that are far beyond human comprehension, including space exploration, medical science and so on, and, on the other hand, wealth concentration and income inequality, diminishing employment opportunities, environmental cost and so on. This study attempts to use tax policy as an economic tool to address the challenges that arise from AI advancements. The study critiques the fact that existing tax policy suggestions have not been effective enough and calls for a comprehensive approach to resolving the issue, basing its core on redistribution policies and international cooperation. The study presents a tax design model for the future that features a unique excess profit taxation, probable metrics for redistribution and an international organization structure for AI governance.