Wyden pitches data-center excise tax as Democrats' AI split widens

Sen. Ron Wyden's newest move on AI is a tax bill, not a moratorium, and the framing is the story. As NOTUS reported, the Oregon Democrat, who is the highest-ranking Democrat on the Senate's tax-writing body, is proposing a "low single-digit" excise tax on data center company revenues, alongside stripping data centers of access to opportunity zones and a tax incentive for real estate trusts. Even space-based data centers serving U.S. customers would be pulled in. Wyden's own line, quoted by NOTUS, is that "American communities are rightfully questioning whether the rapid build-out of data centers across the nation will benefit them."

The plan lands in what NOTUS characterizes as roughly a half-dozen competing Democratic approaches. Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez want a nationwide moratorium on new data centers until safeguards are set, and Sanders has separately floated a 50% equity tax on AI giants. Rep. Greg Casar, chair of the Congressional Progressive Caucus, wants a token tax that scales with computing power. Sen. Elizabeth Warren has proposed taxing the energy data centers consume. Rep. Ro Khanna's Data Center Bill of Rights would give localities the authority to block projects. Sen. Ruben Gallego wants tax breaks stripped and companies made to pay for grid upgrades.

The politics behind all of it are what make the tax fight real. Gallup found in May that 7 in 10 Americans oppose data center construction near them, and the share saying AI does "more harm than good" jumped from 31% to 39% year over year. NOTUS reports data center construction costs rose roughly $130 billion in the past year. Alex Jacquez of the Groundwork Collaborative told the outlet that "AI and data centers are going to be a flash point for the next presidential election."

The honest caveat is that none of this is close to law. Wyden is the ranking Democrat on Finance, not the chair, and NOTUS frames the party's internal split, moratorium camp versus regulation camp, as widening rather than resolving. What the reporting does not give you is the actual excise rate Wyden lands on, how it would be calculated against fast-moving cloud revenue, or which hyperscalers pushed back in drafting.

For anyone building large-scale AI infrastructure, the signal worth taking is that the cheap-tax era for data centers is politically over on the Democratic side, and the live argument is now about which mechanism gets pulled first.