U.S. policy has long favored lower taxes on profits and investment. That might need rethinking. Economists don't typically worry about machines replacing people. Job displacement is, after all, a natural byproduct of labor-saving technology. Interfering with that process goes against everything economists are trained to believe.

Artificial intelligence is starting to change that. More than 1,000 economists, including 17 Nobel laureates, were worried enough to sign an online petition circulated this month by Stanford University's Erik Brynjolfsson warning of "large scale job displacement" from AI and pleading for action.

But what action? As it happens, there is one policy response drawing growing support, at least among economists if not legislators: Stop taxing capital more favorably than labor. This runs counter to decades of tax policy in the U.S. and indeed most advanced nations. To attract investment and boost growth they have lowered taxes on profits, business investment, capital gains and dividends. In the U.S., the effective marginal tax rate on workers (income tax and payroll tax) is now 27%, compared with 14% for new business assets and 4% for equipment, according to the Congressional Budget Office.

Lower taxes on capital that made sense in normal times might not in the face of a technology that could wipe out jobs to an unprecedented degree. "There's a reasonable case that with the rise in AI, it's more important to protect labor demand than to encourage more capital investment, and therefore capital taxes could be higher," said Harvard University economist Doug Elmendorf, a former CBO director.