There are two ways to close the gap: attach a cost to machine work, or reward employing people. The tax side is the larger and louder half — every serious proposal answers the same four questions in a different order, and lands in one of eight categories depending on the answers. The incentive side is smaller, quieter, and the only part with bipartisan sponsorship today. Read the sequence first, then the comparison, then the incentive side.
Read left to right: the thing being measured, the moment tax attaches, who writes the check, and where the money is earmarked.
Who remits is not who bears it. Incidence is the hardest fight in every one of these bills.
Grouped by what they tax rather than who proposed them. The three ratings are the axes economists argue over most: whether the base tracks actual usage, how hard it is to audit, and how much it risks discouraging investment.
RATINGS SYNTHESISED FROM PUBLISHED COMPARISONS INCL. ABBOTT & BOGENSCHNEIDER (2018), BOGENSCHNEIDER IN TAX NOTES (NOV 2025), THE TOKEN-TAX POSITION PAPER (ARXIV 2603.04555) AND KORINEK & LOCKWOOD FOR BROOKINGS (JAN 2026). SEE RESEARCH.
Every mechanism above works by attaching a cost to machine work. The mirror approach leaves AI alone and rewards employing people instead — a smaller, quieter set of proposals, and the only part of this debate with bipartisan sponsorship on the board today.
The asymmetry is the whole argument: a company that cuts an employee stops paying payroll tax, while the system doing that work pays none. H.R. 10044 attacks it from both ends, with rates that escalate automatically when national unemployment passes five percent.
Lowering employer payroll tax does the same work without touching AI at all — and it is the version economists across the spectrum find easiest to defend.
CASAR OP-ED, MAY 2026 ↗The AI Workforce Training Act — Reps. Gottheimer (D-NJ) and Lawler (R-NY) — would let companies claim a credit worth 30% of qualified expenses for teaching employees to use, manage, and build AI systems, capped at $2,500 per employee a year.
Accredited courses, certificate programs, and workshops all count. It is the rare measure here with a Republican co-sponsor.
FEDSCOOP, FEB 2026 ↗The Work Opportunity Tax Credit — the federal government's standing subsidy for hiring people who face barriers to employment — has been in a legislative pause since its authorization expired on 31 December 2025.
Without new legislation, employers generally cannot claim it for anyone who started in 2026. Renewing it is the fastest available move on this side of the ledger, and it needs no new tax to work.
IRS — WOTC ↗Tax practitioners advising companies read current federal law as having changed the economics of workforce planning in favour of automation, and describe a new round of state competition in which jurisdictions offer AI and automation investment credits rather than labor-based ones.
So the incentive side is not starting from neutral. Any credit for employing people is being written on top of a code that already rewards the opposite choice — which is why most sponsors pair a credit like these with one of the eight categories above.
ELLIOTT DAVIS, DEC 2025 ↗