Gallego pitches 10 percent excise tax on data center revenues

Gallego's proposal draws on his upbringing in Arizona and the state's recent experience of rapid growth and economic change, framing his concern that wages are not keeping pace with rising prices. His agenda extends well beyond AI, covering sectoral bargaining to set labor standards for entire industries, paid leave requirements, reclassifying certain gig workers as employees, and requiring more notice ahead of mass layoffs.

The AI-specific measures would direct new revenue toward a public works program, which Gallego describes as necessary to avoid "massive unemployment" from AI adoption. He argues that data centers and AI companies "cannot just be operating untouched and also unbothered" in terms of their effect on labor markets and communities.

How much of this becomes law is likely to hinge on Democratic control of the House, Senate, and White House come 2029, since Gallego proposes using budget reconciliation to pass as much as possible with a simple majority. His willingness to challenge the Senate parliamentarian if a minimum wage hike is ruled ineligible could also shape whether the package survives procedural review.