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 AI Job Losses Could End Income Tax in 5 Years? Monzo Founder Issues Stark Warning

Artificial intelligence is no longer just a futuristic concept—it’s rapidly reshaping how businesses operate, how people work, and potentially even how governments collect taxes.

In a thought-provoking statement, Tom Blomfield, founder of Monzo, has warned that income tax itself could become obsolete within the next five to six years.

Instead, governments might shift toward taxing AI infrastructure, such as data centers and computing power.

A Radical Shift: From Taxing People to Taxing Machines

Speaking on The Rest is Money podcast with Robert Peston, Blomfield suggested a future where human labor is no longer the primary source of economic value.

“We won’t tax human labour—we’ll tax compute,” he said.

In simple terms, this means governments could generate revenue by taxing:

Data centers

AI processing power

Large-scale computing infrastructure

The idea is straightforward: if machines are doing the work, then machines should be taxed—not humans.

AI Is Already Replacing White-Collar Tasks

Blomfield’s warning is rooted in a growing reality—AI systems are becoming incredibly capable.

He pointed out that modern AI tools are already:

Performing at levels beyond university professors in specific domains

Outperforming humans in narrow, specialized tasks

While current AI models are still limited (what he calls “narrow geniuses”), the pace of development is staggering.

He believes that by the end of 2026, AI could become far more generalized, meaning it can handle a wider range of tasks with minimal human input.

This aligns with views from industry leaders like:

Dario Amodei

Sam Altman

Both have previously suggested that AI could soon automate tasks like coding—something that’s already starting to happen.

Real-World Impact: AI Is Already Changing Work

This isn’t just theory—it’s already happening inside companies.

At Spotify, for example, co-CEO Gustav Söderström revealed that:

“Our most experienced developers haven’t written a single line of code in months.”

AI tools are increasingly handling routine engineering tasks, allowing developers to focus on higher-level decision-making.

Meanwhile, data from job platform Adzuna shows:

Entry-level job postings are down 35% since late 2022

This suggests that junior roles are being hit the hardest, as AI takes over repetitive work.

Why the UK Could Be Hit Hardest

The potential disruption is especially significant for the United Kingdom.

According to reports, around 81% of the UK’s economy comes from the services sector—industries like:

Finance

Consulting

IT services

These are exactly the areas where AI is advancing the fastest.

Financial giant Morgan Stanley has also warned that the UK could face a major AI-driven employment shock due to this reliance.

What Happens to Government Revenue?

Here’s where things get serious.

In the UK:

Income tax + National Insurance make up about 42% of government revenue

Other taxes (like property or capital gains) contribute only around 4%

If AI reduces human employment significantly, this model could break down.

Even OpenAI has suggested that governments may need to rethink taxation entirely, including:

Taxing capital and corporate profits

Introducing a “robot tax” on automated systems

The Challenges of Taxing AI

While the idea sounds logical, implementing it won’t be easy.

Governments face several challenges:

Defining what counts as “AI infrastructure”

Measuring usage and value generated by AI

Dealing with resistance from large tech companies

Previous attempts to tax global tech giants have already faced strong pushback, highlighting how complex this issue is.

A Glimpse Into the Future

Blomfield’s prediction might sound extreme—but it reflects a deeper shift happening right now.

We are moving toward a world where:

Machines create more value than humans

Work becomes increasingly automated

Economic systems need to evolve

If this trend continues, the idea of taxing human income could indeed become outdated.

Final Thoughts

The rise of AI is not just changing jobs—it’s challenging the very foundations of our economic systems.

Whether or not income tax disappears in the next five years, one thing is clear:

Governments, businesses, and workers will all need to adapt—quickly.

The future may not be about how much people earn, but about how much intelligence machines produce.

Disclaimer

This article is based on expert opinions and current industry trends. Predictions about AI and taxation are speculative and may evolve over time.