Sanders proposes $7 trillion AI tax to fund public dividends

Key Takeaways

• Sanders' plan would tax 50% of stock from AI companies making $200M+ in annual AI sales
• The $7 trillion fund could generate over $1,000 yearly per American in dividends
• A new bipartisan commission would gain voting shares to block corporate decisions harming the public

Senator Bernie Sanders has introduced legislation that would impose a one-time 50 percent tax on the stock of major AI companies, channeling an estimated $7 trillion into a sovereign wealth fund for American citizens. The proposal, shared exclusively with AP News, represents the most aggressive government intervention into the AI industry ever proposed by a sitting U.S. senator.

Under the plan, any AI company generating $200 million or more in annual AI sales would face the stock tax. New firms would trigger the tax once they hit that revenue threshold. Sanders estimates the resulting fund would generate "hundreds of billions of dollars annually" through investments, with 5 percent annual dividends translating to more than $1,000 per American each year.

What would the Sanders AI tax fund pay for?

Beyond direct payments to citizens, the fund would support healthcare, education, and housing programs. But the legislation goes further than a simple wealth transfer. Sanders wants Americans to have "direct influence over corporate decision-making" at the companies being taxed.

The bill creates a bipartisan Independent Commission for Democratic AI. Seven members, nominated by the president and confirmed by the Senate, would oversee the fund. Using voting shares acquired through the tax, the commission could block corporate decisions deemed harmful to the public.

"The public has got to have a significant seat at the table to make sure that terrible things do not happen to ordinary people," Sanders told AP News. "The benefits cannot simply go to the handful of wealthy corporations. They will be shared by the American people."

Why AI executives oppose the 50% stock tax

Some tech leaders, including OpenAI's Sam Altman and Anthropic's Dario Amodei, have voiced support for public benefit programs tied to AI. Their proposals are considerably more modest. In a meeting with Sanders, Altman remained "far apart" from the senator on how much stake the public should hold in OpenAI, according to sources present.

Sanders characterized the gap bluntly. "People like Sam Altman... are saying: 'OK, look, we're making zillions of dollars, so we're going to be nice guys and maybe we'll buy off the public. We will give 5 percent of our profits back into the government,'" he said. "That's not what we're talking about."

The legislation includes a requirement that could prove equally contentious: AI firms must split their AI business from non-AI operations. That provision would directly affect companies like Elon Musk's xAI, which recently merged with X and then SpaceX. Reports suggest Musk may be planning a mega-merger between SpaceX and Tesla, a move that would become far more complicated under Sanders' framework.

Does the proposal have any chance of passing?

With Republicans controlling Congress, the odds look slim. David Sacks, who served as Donald Trump's AI czar, dismissed the legislation before details were even public. On the All In podcast, Sacks called it "a straight up confiscation of property" that would set "a terrible precedent."

Sacks acknowledged having "sympathy" for Sanders' concerns but prefers "voluntary ideas for some public ownership of AI companies," aligning more with Trump's approach. Trump has floated the idea of government stakes in AI firms but has shown no appetite for mandatory taxes of this scale.

Sanders appears realistic about the bill's immediate prospects. He described the legislation as "a starting point for discussing how Americans should benefit from AI" rather than an expectation of quick passage. Anti-AI sentiment is rising nationwide, and Sanders intends to campaign on the fund concept.

"We think this is the best that we could do at the moment, and it's certainly a major, major, major step forward from giving unilateral and total power to a handful of multi-billionaires," Sanders said.

How would the sovereign wealth fund compare to existing models?

Sanders' concept draws on established precedents. Norway's Government Pension Fund Global, built on oil revenues, holds over $1.4 trillion and invests globally for citizen benefit. Alaska's Permanent Fund distributes annual dividends to residents from oil royalties. Both models demonstrate that large-scale public wealth funds can function.

The difference: those funds taxed natural resources extracted from public land. Sanders is arguing that AI companies, trained on publicly available data and benefiting from public infrastructure, represent a comparable common resource. That framing will face fierce opposition from an industry that views its models as proprietary innovations.

Frequently Asked Questions

How much would Americans receive from Sanders' AI fund?

Sanders estimates each American would receive more than $1,000 annually in dividends, representing a 5 percent annual return from the $7 trillion sovereign wealth fund.

Which AI companies would pay the 50% stock tax?

Any company generating $200 million or more in annual AI sales would be subject to the tax. This includes major players like OpenAI, Google, Microsoft, Anthropic, and Meta.

Would the AI stock tax require companies to restructure?

Yes. The legislation requires AI firms to split their AI business from non-AI operations, which would significantly affect conglomerates like Elon Musk's xAI-X-SpaceX combination.

What is the Independent Commission for Democratic AI?

A proposed seven-member bipartisan body that would oversee the sovereign wealth fund and use voting shares to block corporate decisions deemed harmful to the public.

Will Sanders' AI tax legislation pass?

Unlikely in the near term. The Republican-controlled Congress opposes it, and Trump's former AI czar David Sacks called it 'confiscation of property.' Sanders frames it as a starting point for debate.

Source: Ars Technica