Vinod Khosla has proposed changes to the US tax system to address concerns about job losses linked to artificial intelligence (AI). He suggested eliminating federal income tax for Americans earning less than $100,000 and managing the revenue by increasing taxes on capital gains.

Khosla said taxing capital gains at the same rate as income could allow around 125 million lower- and middle-income Americans to avoid paying federal income tax without reducing government revenues.

The American venture capitalist and one of OpenAI’s early investors has argued that American policymakers need to respond to growing public anxiety and has outlined the need to rethink how income and capital are taxed as AI reshapes the economy.

Speaking at a forum in Washington, Khosla told the Financial Times, “When I talk to people, the biggest thing is fear of AI taking their job by far,” adding that this would be “the single biggest issue” in the 2028 US presidential election cycle.The report notes that AI has moved higher on voters’ list of concerns this year, as its effects on areas such as jobs, the economy, mental health and warfare have become more visible. The Trump administration has opposed attempts by individual states to introduce stricter rules.

However, there are signs of a divide within, as some supporters are calling for tighter controls on AI.

What Vinod Khosla said about the current US AI policy

Khosla, who was a major Democratic donor in recent election cycles, said the Trump administration had “generally done a pretty good job” on AI policy, the FT report noted.He pointed to AI and crypto tsar David Sacks and senior State Department official Jacob Helberg, who co-hosts this week’s Hill and Valley Forum.

Helberg is married to Keith Rabois, a managing director at Khosla’s firm.At the same time, he said Trump has a “complete lack of values of any sort” and a “negotiating style that destroys credibility”.Khosla added that he had not decided who to support for president in 2028. He criticised two frequently discussed Republican contenders: vice-president JD Vance and secretary of state Marco Rubio for tolerating Trump’s “values”.He also criticised Democrats, saying the party’s weaker fundraising ahead of the November midterm elections reflects donor “frustration with going too far left”.He said he had spoken “briefly” with California governor Gavin Newsom, a Democrat, about AI but was looking for a “surprise” presidential candidate to emerge, the report added.“Democrats are too focused on the wrong thing, which is job preservation, not providing security to those who are displaced. Those are fundamentally different things. So, we’ll see who comes out in the middle. My view is every election cycle we have a surprise. Obama was a surprise. Trump was a surprise . . . So I’m hoping we’ll have a surprise,” Khosla added.