Sen. Mark Warner floats data center tax for worker retraining

At an AI summit in Washington, D.C., on Wednesday, Sen. Mark Warner proposed taxing data centers that power AI systems and directing the money to local worker retraining programs. He has not introduced a bill.

Warner framed the idea as a response to labor-market pressures he sees from automation. He pointed to a 35% drop in U.S. entry-level job postings since 2023, recent layoffs at large technology companies, and feedback from business leaders. According to Warner, one venture capitalist told him recent breakthroughs in large language models led him to write software investments down to zero, and a major law firm reported pausing first-year associate hiring because AI can handle much of their initial work.

Under the concept, data center tax receipts would be steered to training and upskilling close to new facilities, including programs to prepare new nurses and courses that teach AI skills. The goal, he explained, is to continue building computing infrastructure while ensuring nearby communities share in the benefits.

Warner indicated he had considered whether chip manufacturers, large AI developers, or major users such as financial firms should bear more of the cost. As he put it, “the easiest place to extract the pound of flesh is probably going to be from the data centers.” He added, “I’ve thought for a long time there’s an obligation from the industry to help figure this out and help pay for it.”

He positioned the proposal as an alternative to calls to freeze new sites. On the same day, some lawmakers introduced a bill seeking a moratorium on data centers. Warner signaled opposition to a halt, arguing, “A data center moratorium simply means China is gonna move quicker, and this is one where we can’t lose.” He added there is “no stuffing the genie back into the bottle” on AI and the facilities that support it.

Local pushback to data centers has grown in several states, with residents and officials citing noise, pollution, and higher electricity costs. Warner argued any build-out should include strict requirements preventing utilities from shifting water and power costs onto households. He also pointed to using tax revenue for visible community projects and workforce programs to address anxiety about job security tied to AI.

He cited an example in Virginia’s Henrico County, where data center tax receipts helped seed an affordable housing project. He also referenced a proposal in Virginia to repeal state tax incentives for new data centers, which officials estimate cost state and local governments nearly $2 billion a year in forgone revenue. Warner noted that other states may weigh similar changes.

Public attitudes, he noted, are increasingly skeptical. A recent national poll found 46% of registered voters view AI negatively, compared with 26% who view it positively. Without clear returns to host communities, he warned, “the pitchforks are coming out.”

Warner did not provide a timeline for introducing legislation and offered no details on tax rates or eligibility. He emphasized reaching agreement on a mechanism that supports continued AI infrastructure investment while helping workers move into roles where demand is rising.