Congressional progressives want to tax artificial intelligence companies to bankroll a federal employment program for displaced workers, even as the labor market keeps adding jobs and unemployment stays near historic lows.
Reps. Greg Casar of Texas, Valerie Foushee, and Sara Jacobs held a virtual press call to unveil the proposal, joined by Sen. Bernie Sanders and backed by statements from Rep. Alexandria Ocasio-Cortez and Sen. Elizabeth Warren. Their pitch: AI will wipe out millions of jobs, and Washington needs to act before the wreckage piles up.
The problem for their argument sits in the Bureau of Labor Statistics data they'd rather not discuss. Since AI chatbots hit the market in late 2022, the U.S. economy has added non-farm payroll jobs every single year. Unemployment has stayed below 4.5% across that entire window. The mass displacement Democrats keep warning about has not materialized in the federal government's own numbers, Fox News Digital reported.
The legislation, called the AI Tax and Work Protection Act, would levy taxes on major AI companies based on token sales or product revenue, whichever produces the larger bill. Under its terms, the tax rate would automatically rise when the national unemployment rate increases, directly linking AI companies' financial obligations to broader labor market conditions, Newsmax reported.
Casar, who chairs the Congressional Progressive Caucus, framed the federal government as asleep at the switch. In a press release tied to the rollout, he said:
"The path we are on is clear. AI will make a small number of investors and executives even richer, while it eliminates jobs for millions of Americans, and the government does nothing about it."
He took a swipe at the only major AI provision Congress has considered so far, a proposed 10-year moratorium on AI regulation included in the "One Big Beautiful Bill Act." That provision was struck out in the Senate and never became law. Casar called it "a failed effort to prevent states from regulating the industry."
Sanders, who caucuses with Senate Democrats, went further at an April press conference.
"How the h*** do you go forward and throw millions of people out on the street without planning what's going to happen?"
He also called AI "the most transformational technology in the history of the world" and warned that workers in the labor force face "a good chance it will take your job." To back up the claim, Sanders cited a Stanford paper titled "Canaries in the Coal Mine?" that found a 16% decline in employment for younger workers in AI-exposed jobs such as computer programming and customer service.
The Casar bill did not emerge in a vacuum. Democrats have been building a drumbeat on AI and jobs for months. In December 2025, Ocasio-Cortez declared that "an overwhelming majority of Americans now worry that AI will take their jobs and leave them permanently unemployed." By March 25, 2026, she and Sanders stood together at the U.S. Capitol to announce a separate measure, the Artificial Intelligence Data Center Moratorium Act.
Warren added her voice in June, warning that "if AI could disrupt half the workforce, we can't wait until people lose their jobs to act."
That string of statements, half the workforce, millions on the street, permanent unemployment, paints a picture of economic catastrophe. And yet the concrete numbers tell a different story. Employers cited AI as a factor in 54,694 job losses in 2025, according to Newsmax. That figure landed amid more than 1.1 million total announced job cuts across the economy, making AI a factor in roughly 5% of all cuts, not the dominant force Democrats describe.
The Wall Street Journal reported that several companies resumed hiring after realizing AI was not replacing junior workers, defying earlier market projections. That finding cuts directly against the premise of the Casar bill, that AI displacement is so imminent and so severe that Washington must intervene with a new tax-and-spend program before the jobs vanish.
Taylor Budowich, founder of the Innovation Council and a former Trump White House deputy chief of staff, pushed back hard on the Democratic framing.
"Democrats keep telling American workers that AI is going to take their jobs. The truth is that President Trump's AI boom will only make the American worker more productive, and more employable, than ever before."
Richard Stern, an economist with Advancing American Freedom, a conservative think tank, drew a historical parallel. He pointed to the Jacquard loom, invented in the 1820s, which used an early punch-card system to automate weaving patterns. The technology displaced some manual labor, and created entire new industries in the process.
Stern framed the debate as a fundamental question about human potential and economic freedom:
"It's showcasing the difference between free market and central planning, but it's also showing the difference in what you think it is to be human. Do you think it is to merely do the work that you're told to do? Or is it to do things that provide new value and new service to your neighbors?"
Stern also offered a pointed comparison between Democratic faith in government solutions and the tendency to expect flawless output from AI tools like Anthropic's Claude chatbot. He described users telling the program, "'Claude, do whatever, no hallucinations, make no mistakes,' right?" Then he applied the same logic to the progressive vision of government.
"Democrats have viewed government as that for 200 years, right? They're like, 'government, solve this problem that no one else can figure out, no hallucination, no mistakes, no corruption,' and I think it's people who are just unwilling to recognize that the government is a collection of people."
His bottom line was blunt: "Do you trust a million nameless, faceless entrepreneurs and innovators? Or do you trust the government?"
The Casar bill faces steep odds in the Republican-controlled House. No companion legislation from the GOP side has surfaced, and the broader political environment favors deregulation over new taxes on a fast-growing sector. The specific details of the proposed employment program, eligibility, scale, administration, remain unclear from the lawmakers' public statements so far.
Democrats are betting that the AI job crisis is just around the corner. The labor market, so far, has not gotten the memo, and building a new tax-and-spend bureaucracy on a prediction the data has yet to support is exactly the kind of government overreach American workers can do without.
