In the past few years, the world has seen a boost of both artificial intelligence and robotics. Bets and bids worth billions are at stake in the future that we will be having drones that can fly themselves, robots that can cook, drive, run errands and even make new identical robots and train them by themselves. What is also at stake are the lives of millions of people who would be replaced by these robots before they even realise the transition. 

Humans are paid for the work they do. Currently, society is built on the premise that companies and the government need people to function. It is one of the significant responsibilities of the government to ensure maximum employment at any given point of time. At the same time, it is also necessary for the government to collect taxes from its citizens, of which, a major proportion comes from income or payroll taxes. Any marginal displacement from either of these on account of any external factors might lead to an effect of substantial magnitude. This is also something that comes as a challenge when people talk about automation. 

To deal with this problem, Bill Gates had talked about the idea of a Robot Tax. What if we could tax robots roughly at around the same percentage we tax human workers and later, the revenue collected can be used for the one who have been replaced with robots and boosts employment in education and health care? This is precisely what Gates suggested, on the foundation that it would allow people more time to settle-in while keeping pace with the probable transition. 

Gates thinks that the board job replacement will happen in the next 20 years or so. Jobs like warehouse work, driving, housekeeping would be the first ones to get automated. Similarly, a 2017 analysis by PwC found out that around 30% of jobs in the UK, 38% in the US, 35% in Germany and 21% in Japan are at risk of automation.

Considering a 30% accuracy rate and assuming that 10.43 million jobs are at a high risk of automation, PwC’s report suggests that the wholesale and retail sector would be the worst hit followed by manufacturing and administrative & support service.

Seeing the huge implications that automation might have, what is also important is the rate at which the transition would happen and if there would be enough time for the people to settle in.

The discussion also revolves around the fact that it would be too difficult to clearly define a robot. The idea, in itself, is very nebulous. If the set criterion defines “Robot” as any device that replaces humans and human jobs, then say for example, would a vending machine be considered as a robot, since it might also cost the livelihoods of several hawkers and vendors? What would be the line that would distinguish a computer program like AI, a tool from a robot? Would considering a proxy like the profit ratio, or the ratio of humans to robots, be justified enough to tax the incomes? 

The supporters of such a tax believe that since automation is growing at an ever-increasing pace and there is certainly no coming back from it (thanks to the bourgeoisie), the tax would slow down the transition if not stop it completely and the tax revenue could be used for the displaced. Considering the grave repercussions of the industrial revolution in terms of falling wages and significant social unrest, the tax would at least continue to fund the government’s welfare schemes which are training oriented towards jobs that would not be much affected by automation, like teaching.

The arguments against the tax revolve more or less around the whole idea of it, its practicality and its implementation. Some people also say that while automation would take away some jobs, that itself would create some new opportunities too. But then again, we also do need to consider the scale of the new jobs and the skills and the expertise that they would require in comparison with the ones that they have replaced. Other people who don’t support the idea of the tax, mention that if at all, automation is going to benefit the drivers of automation and that why not extract more out of them as a part of their marginal increase in the revenue via high corporate taxes and capital gains taxes. 

To conclude it all, even though the idea of levying taxes on robots and/or any technology that thrives on human jobs is new and still unstructured, it actually kindles the fire of a much more serious discussion about the long-term implications of all the disruption in technology that the world is witnessing currently in all its glory. 

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https://emerj.com/ai-sector-overviews/robot-tax-summary-arguments/ (02/2019)

https://www.pwc.co.uk/economic-services/ukeo/pwcukeo-section-4-automation-march-2017-v2.pdf (03/2017)

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