Digital minister Karsten Wildberger had proposed a special tax on AI revenue to fund retraining and further education. ifo president Clemens Fuest calls this the wrong approach for now, arguing that drawing clear lines is hard and that AI driven value is already taxed.
Digital minister Karsten Wildberger had proposed a special tax on revenue tied to artificial intelligence to fund retraining and further education. ifo president Clemens Fuest rejects the idea. He argues that drawing a clear line is already difficult, since AI is now used almost everywhere. Value created through AI is already captured through corporate profits and revenue taxes, he says, and an extra tax would further discourage investment in data centers.
Fuest points to the international principle that profits should be taxed where they are earned. A German special tax on earnings of US companies would conflict with that principle and could provoke retaliatory tariffs from the United States. At the same time, he argues, such a tax would slow AI adoption in Germany and widen its gap with the United States and China.
The concern that AI is driving wages down is, in Fuests view, not currently supported by evidence. Young workers in heavily affected occupations do face disadvantages, but he says it would be premature to conclude from this that incomes overall are eroding. Should a broader shift from labor to capital income emerge later, he adds, the tax system can still be adjusted.
What this means for decision-makers
- Track the political debate over a special AI tax before committing to investment plans.
- Assume existing corporate taxation applies for now rather than a new AI levy.
- Watch for possible international friction if Germany introduces such a tax anyway.
This story was produced automatically from the source named above and checked by software before publication. The image is symbolic and shows neither the event nor a real person. How this paper is made