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Taxing robots is not going to help us face the future

Enrique Dans
Nov 20, 2017 · 3 min read

The question of whether work done by robots should be taxed has been under discussion for some years, with Bill Gates weighing in earlier this year, on February. My opinion is that taxing robots in the same way as humans’ salaries are, it simplistic and raises a number of fundamental questions.

The first is to define what a robot is. Which is not as simple as it might seem: obviously the old-fashioned anthropomorphic idea is no help. We already use all kinds of robots to replace many jobs previously carried out by people, so should we consider software programs as robots, rather than just hardware? Are we going to start, retroactively, to apply taxes to the assembly lines used in many industries for decades, to offices, accounting systems, and how to establish equivalence with the number of jobs that have been replaced? How many workers does a highly mechanized newspaper printing press replace? How should we start the comparison, going back to the days even before printing, or simply with the workers in charge of making the plates with the lead characters of the linotype machine by hand, as was done up until the last two decades of the 20th century in some parts of the world? There is no robot to man ratio, and if there were, it would be meaningless as soon as the robot experienced an improvement and increased its efficiency. In short, this is a much more complicated phenomenon than at first it seems.

There is a second, equally fundamental question: Does it really make sense to impose a tax on an activity that was already being taxed? If a company uses robots and is successful and this generates more income, its profits will be taxed. Does it make sense to effectively handicap or penalize those who use technology to improve production? Where would this take us? As an IBM advertisement from the 1980s argued, we could always give workers coffee spoons to dig ditches so as to increase the number of jobs.

Applying common sense to the robots plus tax equation, it is clear that it makes no sense and it is simply an attempt to find an answer from many decades ago. As more robots take over tasks previously carried out by humans, we should remember that this is what has always happened, and nobody seriously thought about preventing the process, even in times when there was virtually no social protection. Instead, what we need to do is create an environment that enables human beings to find other things to do, to protect them from the immediate consequence of losing their jobs and try to provide them with options to develop their potential.

As technology progresses and more jobs are replaced with mechanization and digitalization, the more we need to break the link between the generation of wealth and work. In the society of the future, people will still work, but they will do so in areas that today we don’t consider work and will have a completely different relationship with it: they will not be forced to do things they don’t like, and will instead choose their jobs based on other criteria.

Universal basic income, which I have written about often, is not longer just proposed by the left as an attempt to redistribute wealth, but also by liberals who see it as a way of streamlining costly and bureaucratic benefits systems.

Searching for and applying solutions to questions such as the reasons for working, along with the impact of migration, or other issues such as identity and work are more useful than trying to apply magical solutions based on old-fashioned and simplistic ideas such as taxing robots.

Such ideas are simply not going to be enough in the face of the disruption taking place in education, work, taxes, wealth creation, etc. We live in radically changing times and we need radical solutions to meet the challenges we face.


(En español, aquí)

Enrique Dans

Enrique Dans

Written by

Professor of Innovation at IE Business School and blogger at enriquedans.com

Enrique Dans

On the effects of technology innovation on people, companies and society (writing in Spanish at enriquedans.com since 2003)

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