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Hello! The popular link in yesterday’s newsletter was about Bill Gates’ warning against unchecked artificial intelligence. I guess you guys are worried too. 

Among other safeguards, the billionaire Microsoft founder proposed taxing AI use. The move, Gates said, would disincentivize companies from ditching human workers too quickly, and keep government services funded as payroll taxes fall.

It just so happens our own David Brancaccio has been reporting on that very issue all week, so that’s where we’ll start today’s newsletter. Keep reading for more on the trade war with Canada, Meta’s big settlement and Dolly Parton’s legacy. — Tony Wagner, newsletter editor  
An illustration of a robot taking jobs from two humans.
Getty Images
Could an AI tax slow down human layoffs?
The U.S. tax code gives tech a financial edge over workers. Some experts say a "robot tax" could level the playing field.
Alyssa is a professional wordsmith. For one year and two months, Alyssa worked — past tense — for a global company that makes toys for kids.

"Amazon listings, Wayfair listings, press releases, you know, the whole nine yards," she said.

But then came artificial intelligence. First, it was the boss asking her to try using ChatGPT. Alyssa found it took longer to check for mistakes and plagiarism than to just write copy herself. Then, the boss handed some of Alyssa's to-do list to an AI bot.

Soon, she was called into a video meeting where she thought she'd get a raise. "We're restructuring — we no longer need you," Alyssa recalled being told.

She left with the strong impression the toy company would use more AI for its writing instead of her. Alyssa asked Marketplace to use her first name only, so speaking to us doesn't hurt her chances of finding a new job. Three years later, she's still looking for a role that pays like that one.

"That's like a huge chunk of our income, because we were hoping to, right after the wedding, based on what we were saving with my income, buy a house," Alyssa said.

She was about to get married. Alyssa's dad jumped in to pay for her wedding dress, given the reduced financial circumstances. But two incomes down to one brought austerity, and she's paying less in taxes because she earns less.

What Alyssa didn't know is that AI has a structural advantage over humans like her.

"Employers pay the government extra taxes for the privilege of employing people," said Ryan Abbott, a technology law expert and partner at the law firm Brown Neri Smith & Khan.

"My university would love to replace me with a chatbot, and they will, as soon as the student satisfaction scores are about equivalent," Abbott said. "But when they do that, one of the unanticipated advantages they get is they pay less in taxes to do it."

Payroll taxes that fund Social Security and Medicare equal 7.65% of wages — a cost employers don't have to pay when they replace humans with AI. Abbott suggested a possible remedy to fix this — though he said this idea is just a thought experiment, not a formal policy proposal.

"Eliminate or reduce payroll taxes on humans," he said. "This has the advantage of leveling the playing field."

If we killed off payroll taxes in America, where would federal, state, and city governments find money instead? Here's one idea: tax robots.
READ MORE


 
News you should know
Let’s do the numbers
  • Tech stocks were back in Wall Street’s good graces today. The S&P 500 closed up 0.7%, the Dow added 0.2% and the tech-heavy Nasdaq jumped 1.6%.

  • Nvidia was the biggest boost to the market today. Shares rose 8.7% after the so-called central bank of AI projected 70% revenue growth next year.

  • Retail inventories, the amount of stuff sitting on store shelves, have been slowing for months. But in July they surged 1.3%, what’s going on?

  • The U.S. economy grew just 1.5% last quarter, the government reported this week. If you’re only looking at one number to gauge the health of this economy, that’s the one. 
The Trump administration
  • President Donald Trump signed an executive order to rename Lake Ontario “Lake America.” It’s a symbolic gesture in a trade war with real impacts on the prices Americans pay.

  • The stakes are high for Federal Reserve Chair Kevin Warsh’s speech tomorrow at the central bank’s symposium in Jackson Hole. Here’s what we’ll be listening for.
Screentime
  • Meta promised to limit children’s access to Facebook and Instagram as part of a landmark settlement this week. Now CEO Mark Zuckerberg is calling on his rivals to play by the same rules.

  • Not for nothing, early data from Australia’s social media ban show these rules might not be very effective anyway.

  • Concerns about mental health and phone addiction are fueling a market for screenless tech.


A view of the Blue Swallow Motel at dusk.
Courtesy Dawn Federico
QUOTE OF THE DAY
“We do sometimes feel as if we might be living in a fishbowl.”
— Dawn Federico, live-in owner of the Blue Swallow Motel in Tucumcari, New Mexico
Route 66, the highway that runs from Chicago, Illinois, to Santa Monica, California, turns 100 this year. In celebration of the centennial, we’re checking in with a few small businesses along the Mother Road.
HEAR MORE
The cover art for Dolly Parton's
Final note
Love for Dolly Parton is bipartisan…
But that doesn’t mean she was apolitical. With the country music legend’s death this week, and with Labor Day coming up, I’ve been revisiting her 1980 tribute to working people, “9 to 5 and Odd Jobs.” The title track is legendary, but listen deeper in the album for a searing cover of Woody Guthrie’s “Deportee (Plane Wreck at Los Gatos).”

It’s a protest song about a 1948 crash that killed four Americans and 28 Mexican farmworkers who were being flown back to their home country. The deportees were unidentified by the media at the time, and buried in a mass grave. It would take decades before a new memorial listed the workers' names, giving their families some closure.

We’ll have more numbers about Parton’s remarkable life and career in tomorrow morning’s newsletter. Subscribe here so you don’t miss it.
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