- Vinod Khosla proposes ending federal income tax for those earning under $100,000 annually.
- The plan addresses expected AI-driven job losses and massive economic deflation by 2030.
- Revenue would be recovered by taxing capital gains at the same rate as ordinary income.
(UNITED STATES) — Vinod Khosla urged future presidential candidates to campaign on ending federal income tax for people making less than $100,000 a year, pitching the idea as a way to cushion AI-driven job losses starting in 2030.
Khosla made the proposal in a March 5, 2026, episode of Fortune’s Titans and Disruptors of Industry podcast, in a conversation with Editor-in-Chief Alyson Shontell.
“‘The next presidential campaign, I hope, gets behind: Nobody pays income tax below $100,000 a year starting 2030,'” Khosla told Shontell.
He framed it as politically powerful because it would reach a large voting bloc, saying the policy would benefit approximately 123 million people.
Khosla argued that “they will vote for a candidate who says no taxes if you make less than $100,000,” linking the campaign logic directly to the size of the group affected.
The idea extends Khosla’s broader warnings about AI and employment, which he has used to argue for major policy changes that shift who pays and how.
In X posts from late February 2026, he said AI will shrink the labor share of the economy and automate 80% of jobs over the next two decades, requiring what he called a “rethink of capitalism & equity.”
Khosla also wrote that the economy becomes “hugely deflationary” by 2035 as automation scales, presenting that timeline as central to his case for rewriting the tax bargain.
He has previously predicted AI will displace 10-20% in the next 5 years, and he said the losses would disproportionately affect women and people of color.
Khosla has pointed to universal basic income, or UBI, as a measure that could be required as AI displaces work, but his March 5 remarks centered on the income tax system and a specific cutoff.
Under his threshold, people below $100,000 would owe no federal income tax, while the government would recover revenue elsewhere, chiefly by changing the taxation of capital income.
Khosla cast the proposal as revenue-neutral by design, arguing it could be paid for by taxing capital gains more like wages and by removing provisions he sees as special-interest carveouts.
A central element is aligning capital gains tax rates to ordinary income rates, an approach he tied to the distribution of who pays those taxes now.
In his X posts, Khosla wrote that 40% of capital gains taxes are paid by those with income over $10 million, using that concentration to argue that higher collections at the top could finance broad relief below the threshold.
Alongside the rate alignment, he criticized what he called “special interest goodies” embedded in the tax code, including tax-loss carryovers, master limited partnerships, and tax-free borrowing against unrealized gains.
He argued those features were “inserted by lobbyists and campaign contributions, not true capitalism,” describing them as preferences that distort outcomes and narrow the base.
Khosla’s argument relies on a shift in how income gets generated as AI changes the economy, with a smaller share accruing to labor and a larger share accruing to capital and business owners.
He has framed that shift as both a fairness problem and a stability problem, with tax policy serving as a tool to spread the gains and reduce the blow of displacement.
The numbers at stake are large because removing most Americans under a six-figure income from federal income tax would take a wide swath of filers out of liability, leaving remaining taxpayers and other revenue sources to cover the gap.
Khosla has described the idea in terms of scale, saying it would remove the bottom 125 million taxpayers from income tax rolls.
He presented that as roughly 80% of 160 million U.S. taxpayers, a framing that emphasizes how broad the cut would be and how narrow the remaining income-tax base could become.
A threshold reference table circulated with his proposal summarizes the distribution and revenue figures he cited, illustrating how quickly federal receipts concentrate as incomes rise.
Khosla also pointed to existing estimates to argue that a large share of households already pay no federal income tax, suggesting his plan would expand a system that already exempts many filers.
The Tax Policy Center estimates 40% of households — 76 million “tax units” — already pay no federal income tax in 2025, he said.
He cited estimates that those under $100,000 pay an estimated $1 trillion to $1.4 trillion annually, out of $2.6 trillion total individual income taxes, using that range as a marker of the funding challenge if the liability disappears below the cutoff.
While Khosla’s plan focuses on federal income tax, it does not address other major levies that many workers face, including payroll taxes and state taxes, which would remain unless separately changed.
Mechanically, his approach would shift more of the federal financing burden toward taxpayers and entities that realize capital gains and toward those facing fewer deductions and preferences if the base is broadened.
That structure, in his telling, matches an economy where more value comes from AI-driven productivity and ownership of capital rather than from wages.
Khosla’s remarks also reflect a debate inside the tech industry about whether AI’s economic effects will arrive quickly and broadly enough to warrant rapid policy changes.
He has aligned his outlook with predictions from Elon Musk about optional work in an abundant AI future, while pointing to skeptics who doubt AI’s near-term impact.
Khosla’s comments contrasted with figures like Michael Burry on AI hype, which he has cited as an example of how differently people interpret the speed and scale of the shift.
The proposal emerged in a mix of long-form and short-form venues, with the podcast providing the cleanest statement of the cutoff and timeline, and social posts offering the broader rationale around deflation, automation, and India vs USA”>capital taxation.
On Fortune’s podcast, he tied the idea explicitly to electoral incentives, describing a promise of no income tax below the threshold as a message candidates could run on.
On X, he spent more time on the details he sees as making the plan feasible, including the focus on capital gains and the removal of provisions that lower taxable income for some investors and businesses.
Khosla invited outside scrutiny of the math behind his proposal, positioning the plan as a starting point rather than a final legislative blueprint.
“Any economist (beyond ChatGPT) willing to help with the math?” he asked on X.
That call for verification underscored the central constraint he has acknowledged: any plan that eliminates federal income tax under a broad threshold — his $100,000 cutoff, sometimes written as $100, 000 in casual shorthand — hinges on whether the replacement revenue from capital gains alignment and preference removal can match the scale of forgone receipts without shrinking the tax base too far.
For now, Khosla has presented the idea as a campaign promise for “The next presidential campaign,” betting that a simple message on income tax could gain traction as AI reshapes work and wages faster than existing safety nets can adjust.
