To be sure, AI adoption could come with some serious fiscal benefits for governments, including higher growth, stronger corporate and wealth tax receipts, and sharper tax administration. AI-powered digitalization could also plug compliance gaps, potentially adding up to 1.3% of GDP in revenue for countries with weak enforcement, according to Moody’s, citing IMF data.
Zandi acknowledged the possibility that AI could be serving as a convenient cover story. “Of course, AI could be a smoke screen for other, less flattering reasons for the cuts,” he wrote, “but I suspect not.” And even if it were, he argued, the effect on the broader labor market may be the same, referring to Block’s stock surge following the announcement.
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