The first Identity Tax named the cost of being outside the dominant group.
The toll paid at every threshold, the job application, the loan approval, the room where decisions get made, by people whose visible characteristics place them on the wrong side of a hierarchy they did not design and cannot easily exit.
This article names a different tax. The one paid by people inside the dominant group who are not at the center of it.
The Illusion of Shared Interest
The British Empire was the dominant civilization for roughly two centuries. But most British people were not the Empire. They were the labor. The soldiers. The administered. The identity conferred real status relative to other groups, making the factory worker feel adjacent to the power even when the power flowed entirely above him.
The American Empire operates the same way. The group identity functions as a psychological buffer. To be American is to be part of the dominant civilization, and that identity carries weight in the global hierarchy regardless of where you sit within the domestic one. We pay attention to the dominant group. We want to belong to it. We defend it. Even when belonging to it costs us more than it returns.
What AI Is Doing to the Middle
The concentration that AI is producing at the top is real and accelerating. But the erasure is happening simultaneously at the middle. The knowledge workers, the professionals, the people whose economic position rested on performing skills that required years of training — their labor AI is now replicating.
AI does not eliminate the output. It eliminates the exclusive relationship between the output and the person who used to produce it. The performance is now separable from the performer.
The middle layer of the dominant group loses the economic foundation of its status claim while retaining the identity. The identity says dominant. The wallet says otherwise.
Erasure in Both Directions
A first-generation immigrant with a phone and a well-configured AI system can produce output indistinguishable from a credentialed professional inside the dominant group. Two competing pressures: the decoupling argument says previously excluded groups can now compress generations of catching up into years. The recoupling argument says the people who control the AI infrastructure become the new dominant group. The Cantillon effect applied to AI.
Both pressures are real. The question worth asking is not which pressure wins. It is: which group are you actually in?
The Fiction That Was Never Real
Reggie Middleton, founder of Veritaseum, made an observation this week that sharpens the argument considerably.
The middle class was not already dead. The middle class never existed. It was a fiction created by those who own productive assets to make sure that the labor class will continue laboring — an empirically false sense of hierarchical status to convince those of intellectual labor that their labor was more valuable than physical labor. At the end of the day, it has always been just the capitalist class, owners of productive capital, and the working class. Everyone else. (Reggie Middleton, X, May 2026)
The status was not wealth. It was not ownership. It was the shine — the managed substitute for a structural position that never changed. AI is now removing the fiction by commoditizing the intellectual labor that maintained it. The accountant, the analyst, the marketer are being compressed first because their labor was always abstraction, and AI compresses abstraction first.
The plumber and the carpenter were always in the working class. The accountant is now discovering they were too. The shine is being removed. What remains is the structural position that was always there.
Groups Within Groups Within Groups
What AI is doing is making the internal structure of the dominant group more visible. When the middle layer's performance is no longer exclusively theirs, the shared interest that held the group together starts to dissolve. The professional who identified as part of the dominant, capable, credentialed class discovers that the credential was doing more economic work than the capability.
The identity persists. The economics shift. The gap between them is where the second Identity Tax lives.