The Wealth Distribution Challenge in the AI Era: Will the Role of Government Really Shift towards Dominance? From small government to big government era, in fact, Trump has promoted the government to invest in American rare earth, semiconductor and quantum computing companies in the past year, which is the form of national capitalism. The promotion of the AI Genesis Act, the collaboration between the Pentagon and top AI companies in May this year to deploy cutting-edge AI technologies in defense classified networks, and the earlier Science and Chip Act also imply government led industrial development. As time goes on, the distribution system driven by AI is becoming increasingly a topic of discussion, especially as AI becomes more and more capable of replacing labor. In the past few days, US Senator Bernie Sanders has proposed a bill to implement a one-time 50% equity tax on artificial intelligence companies that have reached a certain scale, injecting stock into a public sovereign wealth fund to allow ordinary people to directly share the benefits brought by AI. Although the probability of passing this bill in the short term is not high at present. However, considering that in May, the Policy Director of the South Korean Presidential Office also publicly discussed the establishment of a "citizen dividend" through excess tax revenue generated by the AI industry to support youth entrepreneurship, rural areas, artists, and pensions in various livelihood areas. The actions taken by different countries are still worthy of attention, which means that more and more policy makers are paying attention to this issue at the policy level. This also brings to the forefront a deeper question: with the rapid development of AI technology, wealth is increasingly concentrated among a few capital and technology giants. Is the traditional distribution model of relying on labor for income becoming ineffective? Does the government need to significantly strengthen intervention as a result, ultimately ending the traditional model of "small government, big society"? AI is indeed accelerating wealth concentration. Generative AI and automation technology have significantly improved production efficiency, but the benefits mainly fall on the side that owns the technology and capital. A large number of routine job positions - data processing, customer service, basic programming, and even some professional services - are at risk of being replaced. This may lead to a continued decrease in the proportion of labor income in national income, while capital returns and returns on top talent may relatively increase. In history, there have been similar skill biased technological advances in the Industrial Revolution and the Computer Revolution. This time, the impact of AI is faster and has a wider coverage, and the pressure felt by the middle and low-income groups will be more direct. Of course, the key lies in how technology is guided: whether to simply pursue automation or to encourage human-machine collaboration and enhance human capabilities. In reality, this depends on policy choices and business practices, rather than technology itself being destined to bring about certain outcomes. After the weight of the initial distribution (receiving salary through work) decreases, the pressure of the secondary distribution (taxation, redistribution, social security, transfer payments) will naturally increase. This is the basic logic. When wage growth slows down and employment stability decreases, the demand for safety nets and redistribution in society will increase. The "citizen dividend" proposed by South Korea and Sanders' equity tax plan are early responses to this pressure. The former emphasizes using the higher tax revenue generated by the AI industry to give back to the public, rather than directly imposing a profit tax on enterprises; The latter is more radical, directly demanding that large AI companies pay in the form of equity and establish a public fund in one go. This type of idea is being discussed globally, including tools such as robot taxes, data dividends, and sovereign wealth funds. Of course, it should also be noted that Sanders is actually a representative of the extreme left, and many of his views are also based on positions or political games, but they also need to be taken seriously. But will this inevitably lead to a general "strengthening" of governments around the world, completely bidding farewell to the small government model? There is indeed a force supporting this trend. If the dissatisfaction of the middle and low-income groups continues to accumulate, it will transform into a preference for redistribution policies in elections. In history, major technological shocks often accompanied the expansion of welfare states. In the era of AI, the role of the government in retraining, income security, and AI regulation will become more prominent, and the frequency and intensity of the use of secondary distribution tools are likely to increase. However, the constraining factors are equally evident. 1) Firstly, there is international competition. AI is currently the most core strategic resource, and a high tax and high regulatory environment may lead to capital and talent outflows. Countries will not move towards larger governments simultaneously, but are more likely to experience policy differentiation: some countries will strengthen redistribution and intervention, while others will focus more on maintaining innovation incentives and competitiveness. 2) Secondly, AI itself can also make government operations more efficient - digitalization and automation of administrative services can enhance governance capabilities without expanding the size of institutions. At the same time, if the productivity dividend is large enough and the overall cake becomes bigger, the relative feeling of inequality will also weaken, and the urgency of redistribution will not reach the level of 'must end small government'. 3) Finally, policy choices are always the determining factor. It's not AI that automatically determines the direction of society, but how society responds to it. We can choose to focus on incentivizing the development of complementary human resources technologies, or we can balance incentives and fairness through tax neutrality. There are likely to be several coexisting paths in the future. Gentle adjustments are most likely to: 1) Most countries are focusing on social security, retraining, and targeted taxation, with the government's role being strengthened but on a moderate scale; 2) Some countries with high inequality or stronger left leaning tendencies will have greater redistribution efforts; 3) Countries with a deep tradition of free markets may place greater emphasis on addressing challenges through growth and innovation, while strengthening regulation in key areas. If AI ultimately brings about widespread employment transformation and improvement in living standards, many countries can still maintain a relatively balanced government positioning. Simply put, the wealth concentration effect brought by AI is real, and it will make primary distribution face greater challenges, while the importance of secondary distribution will increase. This will push the government to take on more responsibilities in distribution and governance, and the probability of the world entering an era of "big government" is increasing. How to find a balance between stimulating innovation and sharing prosperity will be one of the most significant policy issues globally in the next decade.