AI Tax and Work Protection Act
Sponsored By: Representative Casar, Greg [D-TX-35]
Introduced
Summary
AI excise tax to fund job-creation grants. This bill would impose a new excise tax on certain foundation models and use the receipts to create a Department of Labor‑run Work Protection Administration that awards competitive grants to create jobs with strong wage and benefit rules.
Show full summary
- Workers and families: Grants must hire adults for full‑time jobs of at least 30 hours per week and offer wages at or above applicable minimums plus health coverage comparable to the Federal Employees Health Benefits Program and at least 12 weeks of paid family and medical leave.
- AI developers and sellers: Certain firms that develop, sell access to, or transfer large foundation models would pay a tax calculated either on tokens processed or on transaction value. Rates start at about 2% for tokens and 3% for transactions and increase if unemployment rises, with some research and nonprofit uses excluded.
- State, local, tribal, education, and nonprofit organizations: These entities can compete for grants to fund 17 public interest areas like childcare, education, health, housing, infrastructure, conservation, and local news. The bill also directs $20.0 million per year for Bureau of Labor Statistics data work on AI impacts.
*The bill directs 100% of the new AI excise tax receipts into a WPA Trust Fund to finance the administration and grants and allows specified appropriations from that fund.*
Personalized for You
How does this bill affect your finances?
Personalize government policy and PRIA will tell you what this bill means for your household, plus every other piece of legislation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.
Bill Overview
Analyzed Economic Effects
3 provisions identified: 2 benefits, 1 costs, 0 mixed.
Grants to hire public-interest workers
If enacted, the Department of Labor would create a Work Protection Administration and a WPA Trust Fund. The WPA would run competitive grants for states, local governments, tribes, schools, colleges, and many nonprofits. Grants must hire people whose main duties are done by a natural person and can be used across 17 public-interest areas like child care, health, housing, schools, and infrastructure. The WPA would give priority to permanent, full-time jobs and require the Director to report on grants and jobs within one year of the first award and annually thereafter. Up to 20% of Trust Fund money each year could be used for WIOA training programs starting in fiscal year 2027.
New excise tax on AI models
If enacted, the bill would impose an annual excise tax on covered persons who develop, sell access to, or modify qualifying foundation AI models. The tax would be the larger of two calculations: a token-based amount (fair market value of tokens processed times a token percentage) or a transaction-based amount (consideration for AI services plus related-party covered transactions times a transaction percentage). The token and transaction percentages scale with the U-4 unemployment rate: at U-4 ≤ 5.0% token = 2.0% and transaction = 3.0%; higher U-4 rates raise those percentages under the bill's formulas. Covered transactions take effect one year after enactment. Treasury (with Commerce and Labor) would set rules and could suspend or adjust the tax in extraordinary national emergencies.
BLS study on AI job impacts
If enacted, the Bureau of Labor Statistics would collect and report on how artificial intelligence affects work, including effects beyond job loss. The bill would authorize $20,000,000 per year for BLS for each fiscal year from 2027 through 2031 to do this work. BLS reports must cover impacts like lower pay, fewer hours, and increased temporary jobs.
Sponsors & CoSponsors
Sponsor
Casar, Greg [D-TX-35]
TX • D
Cosponsors
Rep. Foushee, Valerie P. [D-NC-4]
NC • D
Sponsored 8/6/2026
Rep. Jacobs, Sara [D-CA-51]
CA • D
Sponsored 8/6/2026
Rep. Khanna, Ro [D-CA-17]
CA • D
Sponsored 8/20/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov