House Democrats Propose Legislation to Block Tax Breaks for Data Centers Amid AI Expansion

<p>House Democrats are proposing legislation to prevent data centers from receiving federal tax breaks as the expansion of artificial intelligence (AI) accelerates across the country.</p><p>This legislative move places Democrats in opposition to President Donald Trump, who has prioritized data centers in his American AI agenda. The Trump administration has sought to expedite data center development and streamline permitting processes as the U.S. aims for leadership in the emerging tech sector.</p><p>Representatives Kristen McDonald Rivet (D-Mich.) and Don Davis (D-N.C.) introduced the bill on Wednesday, which would restrict data centers from accessing specific federal investment incentives.</p><p>The incentives under consideration were not specifically designed for AI or data centers. However, the significant infrastructure investments made by the industry qualify for these tax benefits, prompting Democrats to advocate for their exclusion due to concerns regarding electricity demand, water usage, and local development impacts.</p><p>The bill has garnered support from 21 additional House Democrats, including Rep. Jimmy Panetta (D-Calif.), a member of the Ways and Means Committee.</p><p>“Washington is giving handouts to Big Tech companies while American families are drowning. I hear that word in my district more than any other,” McDonald Rivet stated during a news conference on Wednesday.</p><p>She highlighted rising costs for groceries, gas, housing, and healthcare, criticizing what she described as “backward priorities” that favor large corporations over working families.</p><p>During the press conference, Rep. Deborah Ross (D-N.C.) expressed concerns about data center development in her Raleigh-area district, alleging that tech companies are acquiring land without transparency regarding their plans, effectively circumventing local input.</p><p>“They've sought to bypass local citizens' right to provide input on putting a data center in their towns and cities,” Ross said.</p><p>She also noted that the rapid growth of the industry is putting pressure on electricity and water resources while developers benefit from federal and state tax incentives.</p><p>“It's Americans struggling to get by, not Big Tech who need tax breaks,” Ross added.</p><p>Rep. Chris Pappas (D-N.H.) argued that the development of data centers is leading to increased costs for his constituents due to the rising demands on electricity and water supplies. He emphasized that communities should have greater control over the locations of these facilities.</p><p>“Our cities and towns shouldn't have these data centers shoved down their throats without any recourse,” Pappas stated. “They deserve the right to decide what's appropriate for their community.”</p>