About This Report  iii

Summary  iv

Figures and Tables  ix

Federal Revenue When AI Replaces Labor: An Examination of Economic Scenarios with Highly Capable Artificial Intelligence  1

Federal Revenue Is Heavily Dependent on Labor Income  2

Framework for Tracing How AI Affects Federal Revenue Channels  6

Our Four Scenarios Bracket the Range of Possible Fiscal Outcomes  9

Modeling Gradual Labor Displacement: A 10-Percent Reduced Workforce Scenario  15

Conclusions  19

APPENDIX A

A Framework for Assessing the Compute Demands for a Task  24

Prices with AI  24

Market Size  25

Barriers to Entry and Business Models  26

APPENDIX B

Model Description  28

Methodology  28

Limitations  32

APPENDIX C

Revision History  33

Abbreviations  34

References  35