Lecture
Most companies, in order to reduce their tax burden, are ready to go to any lengths — for example, firing all their people and replacing them with robots. Economists believe it is time to introduce a new policy. A robot tax would benefit everyone — both the state and the people.
The idea is already being tested in South Korea, which has the highest number of robots per unit of labor force. In 2018, the country introduced something akin to an automation tax.
Companies that invest in robotics and algorithms had their tax breaks cut. It is still too early to talk about the results of the initiative, but in the future such experiments will be conducted in other countries as well.
Many will be pushed toward this decision by the looming total automation.
According to estimates by the McKinsey Global Institute, by 2055 half of the tasks performed by workers in the US could be handed over to machines.
But if people are left without jobs, the state will lose billions of dollars in taxes on their income. And that is just the beginning.
In addition, the government will have to invest in retraining specialists. Not everyone will be able to find decent work — some will have to take on low-paid labor.
The burden on the budget will increase, since millions of citizens will need to be paid social benefits. Additional tax revenue in this case would definitely not hurt, believes New York Times columnist Eduardo Porter.
Taxation would benefit not only the government and citizens, but also the companies themselves, Porter argues. He points out that many businesses are forced to invest in automation in order to save on taxes.
Robots and algorithms do not always handle work better than people and genuinely increase productivity, but they still have to be purchased just to cut the payroll.
Investment in equipment is expensive in the early stages. And that money could instead have been invested in raising productivity, including through a smarter distribution of tasks among staff.
Moreover, many companies receive benefits from the state when they invest in development. They not only save on wages and the associated taxes, but also gain the right to accelerated depreciation.
The abolition of various benefits and subsidies for purchasing robotics can already be considered a form of taxation. According to MIT economist Daron Acemoglu, in the long run this approach will lead to higher productivity and economic growth.
If an employee faces dismissal due to automation, the company should take on the payment of their personal income tax. This is the initiative put forward by analyst William Meisel.
However, as NYT columnist Eduardo Porter concludes, in reality things are not so simple. Before introducing a tax, it is necessary to determine exactly what is meant by the term «robot». It is still unclear what degree of autonomy is being discussed and whether software for optimizing tasks or individual production units fall into these categories.
Tax reform accounting for automation alone will probably not be enough. It will also be necessary to reduce the tax on investment and personal income.
Many experts do not share Porter's opinion. For instance, a group of American analysts has declared any form of robot taxation to be a manifestation of Luddism. In their view, such tactics are inappropriate in an open economy. However, if the situation is left uncontrolled, millions of people will lose their jobs. Which means they will need to be retrained and provided with benefits. Under these conditions, a universal basic income will become a necessity.
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