AI Transition – Run your own scenarios*
This tool is for discussion purposes only to understand the impact, timing, financial, and job impacts of AI to help understand the changes. We hope this will be used responsibly to start discussions on how to address what could be one of the largest impact on society since the industrial revolution.
AI Transition Scenario Calculator
Basic AI modeling tool to estimate how AI could change jobs, federal revenue, and the scale of UBI/UHI-style support over time.
Inputs
Outputs
AI Transition Scenario Calculator: What It Is and How to Use It
The AI Transition Scenario Calculator is a simple planning tool. It helps you explore how widespread AI adoption could affect three big things over the next 10-20 years:
- Jobs (how many roles could be displaced)
- US federal revenue (how tax receipts might change if the workforce changes)
- Support programs (the potential scale of UBI and UHI-style support)
This is not a prediction engine. It is a way to test “what if” scenarios and understand the size of possible change under different assumptions.
What the tool is doing (in plain terms)
The calculator starts with a timeline (start year and end year). Then it creates an “adoption curve” for AI – meaning AI spreads slowly at first, faster in the middle years, and then levels off.
From there, it estimates:
- How much of the job market is exposed to automation
- How strongly that exposure turns into net job displacement
- How job changes might affect federal revenue
- How large UBI (cash support) and UHI (health coverage support) costs could be if tied to displaced jobs
The charts let you hover over each year to see values and percentages.
How to use it
Step 1: Set the timeline
Pick the years you want to model. A common choice is 20 years (example: 2026 to 2046).
Step 2: Track 1 – AI adoption speed
- Midpoint year: when AI is roughly “half adopted” in your scenario
- Adoption speed (1-100): how fast the curve ramps up
- 1-25 = Low, 26-70 = Moderate, 71-100 = Severe
- Max adoption level: how high adoption gets by the end of your timeline
Step 3: Track 2 – Job impact
- Share of jobs that could be automated: long-run exposure
- How strongly AI replaces jobs (1-100): whether automation mostly changes tasks (low) or removes whole roles faster than new ones appear (high)
Step 4: Track 3 – Government response (money)
- Federal revenue as % of GDP: starting point for receipts
- How much displacement hurts revenue (1-100): how sensitive receipts are to job loss
- Ability to capture AI-era revenue: how well new mechanisms replace lost revenue
- UBI and UHI amounts: annual support per displaced person (model assumption)
Step 5: Run and compare scenarios
Click Run, then hover the charts year-by-year. Use Save/Load in the browser for quick testing, or Export/Import JSON to share scenarios.
Disclaimers
- This tool provides illustrative scenarios, not forecasts.
- It uses simplified relationships and does not model all economic feedback loops (inflation, interest rates, trade, migration, wars, policy shifts, business cycles, etc.).
- “Job displacement” here is an estimate of net roles affected, not a direct measure of unemployment.
- Results should be used for planning conversations, sensitivity testing, and education – not for personal financial decisions or policy design without deeper analysis.
- The Tax Project Institute is not an official Government agency
- Estimates are for illustrative purposes and not for official use.
AI Job Loss Transition Modeling Calculator
Follow the Money: State and Federal Money Flows
The Federal government isn’t just a tax collector — it’s the largest redistribution engine in the country for funding to the States.
Each year, trillions of dollars in Federal taxes are collected from across all 50 states. That money is then redistributed through spending on public programs, infrastructure, grants, contracts, aid, and more. Much of that funding is redistributed back to the States.
But who gives the most — and who gets the most back? Is what you give, what you get back?
Today, we’re excited to launch our latest Tax Project Citizen tool, our Fund Flow app — a powerful, interactive tool that makes it easy to explore the financial relationship between each State and the Federal government.
What is Fund Flow?
Fund Flow is a data-driven web app that brings clarity to a complex topic. Using visually rich, interactive charts and maps, you can explore:
- Which states are net contributors (giving more than they get)
- Which states are net recipients (getting more than they give)
Whether you’re zooming in on your own State or comparing nationwide trends, Fund Flow gives you a clear view of where the money flows.
Why It Matters
This isn’t just about dollars and cents — it’s about understanding how our system works.
Most people don’t realize how much their state sends to Washington D.C. — or how much it gets back. Fund Flow gives everyone the tools to:
- Understand where your tax dollars go
- Stay informed about how Federal funding is redistributed
- See which states benefit the most or least from Federal spending
- Engage with real data in a clear, accessible way
Informed citizens are essential to a healthy democracy. By making these financial flows visible, Fund Flow helps you ask better questions, have smarter conversations, and hold decision-makers accountable.
Explore Fund Flow
Try out Fund Flow today! It’s free to use and built for everyone — from citizens and educators to journalists, researchers, and policymakers.
Introducing Fund Flow
The conversation around wealth, particularly the wealth of billionaires or the Top 1%, has intensified. With some pointing to inequality, many ponder whether the ultra-rich hold the key to solving some of the most pressing financial challenges faced by the Nation including the funding of public services through taxation.
Amid discussions on tax reforms and increasing the tax burden on the wealthiest, a crucial question arises: Can Billionaires and their fortunes significantly impact U.S. tax revenue needs if fully utilized?
Assessing the Solution
As of April 2023, there were approximately 2,600 billionaires globally1, with approximately 750 of them residing in the United States. This number is surprisingly low to many people, and the perception from Media may give the impression that many more people live the lifestyle of the rich and famous, like the Kardasians, than actually do. Cryptozoologist Grover Krantz estimated that there were roughly 2000 BigFoot creatures in North America, and if you believe that then you literally have a greater chance of meeting BigFoot than an actual Billionaire in person.2 However, if you did meet them the collective net worth of all U.S. billionaires was estimated at about $4.5 trillion according to Forbes data3.
This is a staggering figure for sure, yet alone for less than 1000 people, the kind of wealth that is hard to comprehend for the average American. However, one’s beliefs and feelings regarding Wealthy individuals and how their wealth should be used and our right to use it is distinct from the elephant in the room: are Billionaires the solution to our Tax problems, and budget shortfalls?
Take it All
To answer this hypothetical question let’s say we appropriated, not just raised their Taxes, but took the entire fortunes of all U.S. billionaires and completely wiped them out, would it cover the U.S. tax needs, and for how long?
For fiscal year 20234, the U.S. federal government spent around $6.2 trillion even though we collected only $4.5 trillion through taxation with the 2024 Federal budget at $6.9 trillion.5 This figure far exceeds the total net worth of U.S. billionaires, and that doesn’t even include State, and Local Taxes which would be over $10 trillion annually spent by our Government as a whole. Thus, even if we theoretically seized and liquidated all billionaire assets, it would only cover a portion of a single year’s federal expenditures, and clearly not be a long term structural solution, what would you do in year 2, year 3?
Challenges with the Solution
Even if you thought this hypothetical situation was a great idea, disregarding the substantial legal and ethical issues taking all of a citizens property create, the challenges and problems it presents make even the thought of using all billionaire wealth as a one time boost would prove even less valuable and daunting on a practical basis. First of all, most ultra Wealthy individuals do not derive most of their networth through income like everyone else which makes their wealth harder to tax and retrieve. They have things like art, equity in companies, stamp collections, Real Estate, and physical capital equipment like Yachts. These things are not cash, they could be assessed at wildly different prices, and at great effort by Federal agencies like the IRS, and much of their wealth may not be easily convertible to Cash. If their cumulative wealth is liquidated, and in this case all at once, it would potentially greatly reduce the value of their assets. I mean, if you took all US Billionaires away, who really is going to buy that $50 million dollar Picasso – how big is that market without Billionaires? If all of the shares they have were sold all at once on the open market, prices of these companies would plummet immediately and drastically, greatly altering their theoretical value and estimated net worth impacting individual investors, mom and pops, retirement plans and pension funds all at the same time.
Bottom line, even if you were successful at capturing their assets they would likely be a small portion of their originally estimated value. All this makes the assumption that you would have access to all their assets, and that they wouldn’t hide their wealth, move it offshore, to another country, someplace outside of US reach. Given that they are likely the ones with the means, and ability to pull this off with armies of lawyers, accountants, foreign officials, and banks in their pocket, it would be hard to imagine all their wealth being exposed. However, if the capital, jobs, and innovation that these individuals put into our country disappeared overnight the economic disaster that would ensue after the impact to many of the worlds largest companies through seizure of billionaires assets (which include privately owned companies) and loss of their intellectual and monetary capital, could and probably would have major impacts on the US economy, and likely have a global impact.
Tax Some, but not all, but clearly more
So now that we understand the challenges and implications of taking it all, we can assess the more practical solution of taking some, but not all, but clearly more than we do today from Billionaires. While this is a more likely scenario, and potentially more sustainable, it too has a number of challenges. First, if taking all their wealth wasn’t enough, how is taking a much smaller percentage going to help? Let’s assume that all the tax loopholes are plugged up, and the rates on millionaires increase, President Biden has proposed a minimum 25% tax on the ultra wealthy.6 Given that more than 2/3rds of the approximate 750 Billionaires in the US have less than $5 Billion in Net Worth, if you were able to generate a very substantial $250 Million per year each from this group would net roughly $150 Billion a year. This scenario still isn’t likely given that many of the challenges and implications previously discussed still apply to this scenario, and taking 5% or more of their net worth per annum may not be sustainable. However, since it’s all theoretical it’s a nice budget filler, although it still doesn’t address our needs with annual budget shortfalls over a Trillion dollars. The Interest line item alone on our National Debt was more than 4 times this amount, and growing rapidly ($659 Billion).7 The Kiel Institute for the World Economy estimates that since February of 2022 the US has sent $75 Billion in aid to Ukraine alone8, and that does not include the $95.3 Billion dollar Ukrainian and Israeli aid package recently passed in the US Senate together more than the budget filler for just these one time aid packages.9
The Answer
A portion of the population may support these routes, though maybe not realizing the challenges and implications, whether it be because of the squeeze of higher taxes and the need/want for more services and the inability of the lower and middle class to pay for these, or the thought that the wealthy don’t pay their fair share (See our article on Fair Share), or that Wealth Inequality is unfair in general and they don’t like it, that the tax system has so many legal loopholes that wealthy individuals can exploit to have lower taxes than the poor, plain simple old fashioned jealousy, or the fact that it’s a lot easier to spend other people’s money. Whatever the reason, the concept is clear: Let the ultra rich cover the burden.
Political Calculus
Sadly, Politicians have already done the math, and they understand that it doesn’t work out. They know that Billionaires aren’t the magic bullet, but it makes for great campaign rhetoric and easy sound bites for those willing to believe it and it’s a lot easier and less politically risky than actual solutions. Unfortunately, there is no easy solution to properly fund the US government without significant “investment” from ordinary taxpayers and more responsible fiscal management by our Government. The solutions are Simple, but not Easy. Just like a family that is spending more than they make, the only two solutions are to spend less, or make more. While simple, those are never easy; cutting spending, government shrinkage, and/or higher taxes across the board don’t sit well with the electorate.
“I could end the deficit in five minutes. You just pass a law that says anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election.”10
Warren Buffett
Summary
While the wealth of billionaires is vast, it’s a drop in the bucket of our trillion dollar annual budget deficit and $34 trillion dollar national debt challenges, viewing it as a panacea for the U.S.’s fiscal challenges overlooks the complexity of the economy and the nature of wealth. Tax policy is a tool that can influence wealth distribution and revenue generation, but it requires a balanced approach that considers economic growth, fairness, and sustainability. Simply put, there’s no magic bullet when it comes to tax policy and fiscal sustainability. Like a complex puzzle, it demands careful consideration of each piece to create a coherent and effective solution and the will and stomach to handle it. Billionaires may not be the answer, but they can surely be part of the answer, along with a lot of other ordinary people. Our choices as Citizens of how many services we want, how much we want to pay for them, and who should bear the burden are the balancing act that shapes our democracy.
Citations:
- https://worldpopulationreview.com/country-rankings/billionaires-by-country ↩︎
- LA Times https://www.latimes.com/archives/la-xpm-2002-feb-21-me-krantz21-story.html ↩︎
- Statista https://www.statista.com/statistics/1291685/us-combined-value-billionaire-wealth/ ↩︎
- USA Facts https://usafacts.org/state-of-the-union/budget/ ↩︎
- White House OMB https://www.whitehouse.gov/wp-content/uploads/2023/03/budget_fy2024.pdf ↩︎
- shington Post https://www.washingtonpost.com/business/2023/10/20/interest-debt-payment-treasury/ ↩︎
- Washington Post https://www.washingtonpost.com/business/2023/10/20/interest-debt-payment-treasury/ ↩︎
- Kiel Institute https://www.ifw-kiel.de/topics/war-against-ukraine/ukraine-support-tracker/ ↩︎
- AP https://apnews.com/article/ukraine-aid-congress-senate-china-d7b4846de76a1dfe5d2207b7eb6eeead ↩︎
- https://finance.yahoo.com/news/warren-buffett-financial-plan-eliminate-200013178.html ↩︎
Are Billionaires the Solution?
Taxes fund the essential services of society; education, infrastructure, public safety, defense – all things that underpin our daily lives. These programs aren’t discretionary in an ordered and civil society, and are not easily replicated as individuals or small groups; they’re the supports for our well-being, just like a foundation of a building. A strong society needs a sturdy foundation, and similarly, we shouldn’t take government services for granted. Paying taxes is our contribution to the collective good, ensuring a safe and civilized society.
Evolving Tax Landscape
However, the tax landscape is evolving from taxes that support general purpose basics that serve all citizens as public services to some focusing on specific behaviors1. Tax levies on things like soda, cigarettes, alcohol, single-use bags, gambling, recyclable packaged goods, luxury goods, disposable items, etc. These taxes have a dual purpose: generating revenue and influencing behavior by making certain options less attractive. This raises a critical question: how do we balance the need for essential services funded by traditional taxes with the potential infringement on personal freedoms associated with behavioral taxes and who gets to decide? A fundamental question at the basis of the Social Contracts that form the basis of each country’s constitution (see article on Social Contracts).
Correcting Negative Externalities vs Directing Behaviors
A British Economist named Arthur Pigou described in The Economics of Welfare2 that markets don’t always optimally allocate resources on their own. These “negative externalities” that the market does not include in the price, like a factory polluting a river, don’t cover the cost of the negative health outcomes that may be born from the manufacture and sale of these goods. Hence the term later applied “Pigouvian taxes” illustrate this tension perfectly. Therefore Pigouvian taxes designed to address negative externalities make producers pay for the societal costs of them through taxation, like the aforementioned pollution. While they promote public good, they do so by using the market to influence individual behavior through price changes and market forces. Pigouvian taxes and Behavioral taxes often act the same, by using price and tax mechanisms to influence behavior. However, unlike Pigouvian taxes where you may be able to draw a clear line between correcting for negative externalities like Climate Change by charging a Carbon Tax, behavioral taxes like the Soda tax put into question the government’s role versus individual liberties. It can be said that for example soda leads to weight gain and a higher risk of diabetes, and other health issues and that those increase the cost of healthcare to all, therefore the government has a role in incenting you to stay healthy. However, is this tax really correcting a negative externality or incenting a behavior alone? There is little evidence in cities like Philadelphia that the revenue generated from the soda tax is used to correct the negative externalities by investing in greater health outcomes for soda drinkers3, but to raise general fund revenue for the city. If you want to eat Bacon and Eggs, and smoke three packs of cigarettes, near no one else, a day, while it may not be the best life choices, if you’re paying your own healthcare costs and these choices bring you joy then should the individual be able to make that choice, good or bad?
Choice and Two Tiered Societies
This raises concerns about individual freedom and a potential two-tiered society where only the wealthy can afford certain “vices.” So while some Behavioral taxes are Pigouvian taxes attempting to correct, and direct funds to remediate negative externalities, others are clearly not and just designed to incent behaviors and raise revenue. These types of taxes clearly incent folks economically, potentially limiting choices individuals would make naturally. While we may be doing good, we should question if that is something we wish to regulate ourselves on. Not only does it regulate choice, but most of these behavioral taxes are highly regressive. Soda taxes, Cigarette taxes, Alcohol taxes all have higher impacts on those on the lower social economic scale, impacting a larger percentage of their income. Do we want to create a society where only wealthy people get to choose their vice while everyone else is effectively economically locked out, or should everyone be able to choose the type of drink they want, the bag they want to use, if they want a straw for their drink, etc.
The Sweet Spot
The heart of the issue lies in finding the sweet spot between government intervention and individual liberty. It’s a balancing act. On one side sits the government’s role to promote public health and well-being, while the other represents our individual rights and freedoms. Behavioral taxes aren’t meant to be a direct attack on our choices. They’re designed to “nudge” us towards healthier or more sustainable options. Imagine a parent encouraging their child to eat fruit by making vegetables less appealing – that’s the basic idea. Behavioral taxes aim to make the less desirable option less attractive.
However, the potential for a two-tiered society is a valid concern. When only the wealthy can comfortably afford a sugary drink, it creates an equity issue. The challenge is designing these taxes effectively without disproportionately burdening lower-income individuals. Solutions like using tax revenue to subsidize healthier alternatives can ensure that everyone has access to better choices, not just those who can afford them.
Optimally, we want to create an environment where healthy and sustainable choices are the most attractive option for everyone, but through their own choice. It’s not about imposing a nanny state, but about gently guiding society towards a better future. As we navigate this complex landscape, careful consideration is crucial. Behavioral taxes should be implemented with a keen eye on their broader impact. Only we as individuals can strike the right balance between funding essential services and safeguarding our individual liberties.
Behavioral Taxes: Essential Services vs. Behavior Shaping
US Tax Code
The US Tax Code, officially the IRS Internal Revenue Code (IRC), is almost 7000 pages long. Together the IRC along with Federal Tax regulations, and IRS Guidance are a behemoth with over 70,000 pages of rules, regulations, and instructions.1 Imagine reading “War and Peace” … 54 times in a row — that’s the tax regulation for you.2 Reading it cover to cover would take an average person over 2,300 hours—that’s about 98 days of non-stop reading!3
It’s not static either; it changes annually to reflect new laws and adjustments. In 2020 the IRS made more than 4600 changes to the tax code. That’s more than a dozen changes every day for an entire year4.
Components of Tax Regulation and Guidance
IRS Internal Revenue Code (IRC) – This is the actual US Tax code, and represents the core legal framework. The is the smallest component of the Regulation and Guidance.
Treasury Regulations – These are more specific instructions, and they provide instructions on how the Treasury interprets the IRC including examples of specific tax areas and how to apply the IRC. This represents a moderately sized component of the Regulations and Guidance.
IRS Guidance – This is a broad category that encompasses various resources published by the IRS to help taxpayers understand and comply with the tax code. It represents the largest component of the Regulations and Guidance and includes:
- Revenue Rulings: Official interpretations of the IRC by the IRS on how the law applies to specific factual situations. (Think of them as Supreme Court decisions interpreting the Constitution).
- Revenue Procedures: Statements outlining procedures for taxpayers to follow when dealing with specific tax situations. (Imagine them as IRS regulations implementing the tax code).
- Notices: Announcements from the IRS providing information on tax law changes, upcoming deadlines, or other relevant topics.
- Publications: Informational guides published by the IRS to explain tax topics in a clear and concise manner.
Tax Simplification
There have been many attempts at simplifying taxes, but for the most part there has been limited relief for Taxpayers. Many of the simplifications passed were about reducing tax brackets and simplifying calculations, but not many things that actually simplified taxes for citizens. There have been calls for solutions like the Flat Tax which would greatly simplify the Tax code by eliminating deductions, and simplifying taxes by requiring everyone to pay a flat fixed rate eliminating many of the complexities of the tax code.
Help is Available
Recognizing the Herculean task facing taxpayers, the IRS offers several resources. From the Free File program5, which provides free tax preparation software to those who qualify, to the Taxpayer Advocate Service for those facing tax problems, help is available. There’s also a plethora of guides and FAQs on the IRS website to illuminate the path through the tax jungle.
A significant portion of the population, about 53% according to recent statistics6, seeks some form of help when filing taxes. This help ranges from using software like TurboTax to hiring professionals.
Despite free resources, many opt for paid services to ensure their taxes are filed correctly. Over one-third of taxpayers pay for tax preparation services7, with costs varying widely depending on the complexity of their tax situation.
For those with limited income, paying for tax help might not be feasible. Fortunately, there are programs like the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE), offering free tax help to those who qualify based on income, age, or disability8.
The U.S. Tax Code is indeed vast and ever-changing, making tax season a daunting time for many. While the IRS and government do provide resources to help, the complexity of the system means a significant number of people still seek and pay for professional help. However, there are free alternatives that offer a guiding light through the tax code forest, ensuring that everyone has the opportunity to navigate the intricacies of tax filing without being left in the dark.
Citations:
- Harry Potter book size: https://chilkibopublishing.com/how-many-pages-in-harry-potter/ ↩︎
- Number of pages in the tax code: https://irisreading.com/how-long-would-it-take-to-read-the-entire-u-s-tax-code/ ↩︎
- War and peace length: https://www.goodreads.com/book/show/656.War_and_Peace
Changes to the tax code: https://avitusgroup.com/tax-planning-preparation/biz/tax-law-changes-are-you-keeping-up/
Free File Program: https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free
https://www.irs.gov/newsroom/filing-season-statistics-for-week-ending-may-20-2022
https://www.gobankingrates.com/taxes/filing/43-percent-americans-file-taxes-comfort-home-survey-finds/
Free help services: https://www.irs.gov/individuals/free-tax-return-preparation-for-qualifying-taxpayers ↩︎ - Changes to the tax code: https://avitusgroup.com/tax-planning-preparation/biz/tax-law-changes-are-you-keeping-up/
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Tax Code Jungle: A Guide for the Perplexed
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Tax Project Institute is a fiscally sponsored project of MarinLink, a California non-profit corporation exempt from federal tax under section 501(c)(3) of the Internal Revenue Service #20-0879422.
