Should Robots Pay Taxes?

I was going to use this as an “other opinions” link but then I started thinking about it and decided to turn it into a proper post instead (my sequence on atheism will resume next Wednesday as usual). Here’s the initial interview: https://qz.com/911968/bill-gates-the-robot-that-takes-your-job-should-pay-taxes/.

It’s an interesting proposal, but it has some weird flaws. For example, how do you define a robot vs. just a tool? Should we be taxing hammers because they let carpenters drive in nails more efficiently, therefore displacing other carpentry jobs? What about one of those fancy smart electric (but still manually controlled) saws? They still seem more like tools, but the line is getting blurry. When you add a CNC module to that saw, does it become a robot for tax purposes? Why? The marginal efficiency of the CNC module itself isn’t necessarily that high.

Another issue is that robots are already getting taxed, albeit indirectly. When a company automates away a job, they do so to save money. That money ends up going somewhere (usually the pockets of executives and shareholders) and tax is payed on it there, usually at fairly high marginal rates. You can argue various counter-points about how much tax those people should fairly pay, but at that point we’ve kind of lost the thread of the argument. It’s not at all obvious that “tax robots” is the right solution to the problem of “rich people are good at tax evasion”, and that wasn’t the original claim anyway.

Of course, if you combine the definitional problems with the tax evasion point then you run into another issue: any reasonable formulation of this tax is going to be trivial to circumvent. You’re going to end up with a single minimum-wage worker pressing a green button once an hour just so the machine at the other end doesn’t meet the definition of a “robot”. I mean sure, your tax has saved a job, so in some sense it’s had the intended effect, but not at the intended scale nor in any way that provides actual quality of life to the person in question.

It’s a neat idea, and it makes for some good headlines, but to me a robot tax just ends up seeming silly.

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