According to an article from CEPR, the advent of AI and automation presents significant challenges for tax policy. Economic shifts due to AI include changes in wage distribution, increased capital income, and greater capital income dispersion. Tax policy must balance efficiency and equity, ensuring fair distribution of AI’s benefits. Recommendations include adjusting labour income taxes, rebalancing labour and capital taxation, designing capital taxes to encourage productivity, and addressing distributional challenges beyond tax policy. The analysis emphasizes using direct measures to support those affected by technological changes.