Vinod Khoslafounder of Khosla Ventures backing builders in energy, health, and AI,

Billionaire Vinod Khosla Suggests America Rethink Taxation In The Age Of AI

17 Feb 2026 · 2 min

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Billionaire investor Vinod Khosla suggested that up to 125 million Americans—roughly 80% of current tax‑paying households—should be exempt from income tax as artificial intelligence increasingly automates jobs. He argued that the government could offset the lost revenue by raising capital‑gains taxes and eliminating certain tax breaks, such as tax‑free borrowing against unrealized gains. Khosla’s proposal follows his earlier call for a universal basic income for workers displaced by AI. The piece cites the World Economic Forum’s Future of Jobs Report 2025, which forecasts AI will displace 92 million jobs by 2030, and data from Challenger Gray & Christmas showing tens of thousands of AI‑related job cuts in recent years. The narrative also references other tech leaders—Elon Musk, Bill Gates, Microsoft AI CEO Mustafa Suleyman, and Anthropic CEO Dario Amadei—who warn of massive white‑collar automation and rising unemployment. Finally, it notes that women and people of color are expected to bear a disproportionate share of AI‑driven job loss.

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Billionaire investor Vinod Khosla suggested as many as 125 million people should be exempt from paying income taxes in the coming decades as artificial intelligence gets closer to eliminating a mass number of jobs, suggesting the government make up the lost revenue by relying on capital gains tax. Khosla wrote on X the AI boom will require a, quote, rethink of capitalism and equity, and suggested increasing capital gains taxes would allow the government to eliminate, quote, the bottom 125 million taxpayers from the tax rolls. He also suggested eliminating certain tax breaks like tax-free borrowing against unrealized gains would help to make up the deficit. There are only about 160 million taxpaying Americans, and Khosla's plan would exempt almost 80% of them from income taxes. Last year, Khosla suggested it may be necessary to implement a universal basic income for lower-income Americans whose jobs are eliminated due to AI automation, predicting 80% of jobs will soon be handled by AI. According to the World Economic Forum's Future of Jobs Report 2025, artificial intelligence is projected to displace 92 million jobs by the year 2030. Economic experts have been warning about the loss of jobs due to artificial intelligence automation for years. More than 50,000 jobs cut in 2025 were blamed on AI, according to career services firm Challenger Gray Christmas, with another 20,000 in 2023 and 2024. Tech billionaires like Elon Musk and Bill Gates, as well as leaders like Microsoft AI CEO Mustafa Suleyman, have all suggested artificial intelligence is on its way to automating a significant portion of the white-collar workforce and, in some scenarios, could eliminate the need for traditional jobs altogether. Last month, Anthropic CEO Dario Amadei predicted AI could drive unemployment up 10% to 20% in the next 5 years. Women and people of color are expected to be disproportionately impacted by AI job automation. For more on this story, check out the article at the link in the description.