Democratic lawmakers in the US Congress are currently divided over potential tax frameworks for artificial intelligence. While there is a consensus on the need for regulatory guardrails, the party lacks a unified approach as the November midterms approach.
Representative Greg Casar proposed the AI Tax and Work Protection Act, which suggests a 2% excise tax on AI token usage or revenue if unemployment rates exceed 5%. Senator Bernie Sanders has suggested a one-time 50% equity tax for companies with annual AI-related receipts exceeding $200 million.
Senator Ron Wyden has proposed an excise tax on data center gross receipts alongside the removal of specific tax incentives for these facilities. Meanwhile, Senator Elizabeth Warren and five other senators sent letters to the CEOs of Meta, Amazon, Microsoft, and Alphabet on September 28, 2026.
The letters requested information regarding how these companies utilize tax deductions and subsidies linked to AI investments, which were established under the 2025 tax legislation. The senators also raised concerns about potential lobbying efforts related to the passage of that law.
As of the end of September 2026, no comprehensive AI tax legislation has advanced in Congress. Multiple proposals remain stalled, and the legislative window for action before the upcoming election is considered closed.
