Tax the robots? California (and Bill Gates) is thinking about it. Should we?
We're constantly on the lookout for an "alternative" view on automation - one that defies the notion of robo-corporations throwing millions of humans, and their routine mental and physical labours, on the scrapheap. Universal Basic Income might well be the way to help humans through the transition to a post-work-defined society. But how do we pay for it?
What about one of the oldest tools in the governmental book - tax? Ex-Microsoft-founder Bill Gates (of all people) set things alight a few months ago, proposing that we could reasonably levy a "tax on robots" that irreversably replaced human jobs (he was approving a proposal from an EU official, rejected in Brussels). Gates said in this Quartz interview:
Certainly there will be taxes that relate to automation. Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, social security tax, all those things. If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.
And what the world wants is to take this opportunity to make all the goods and services we have today, and free up labor, let us do a better job of reaching out to the elderly, having smaller class sizes, helping kids with special needs. You know, all of those are things where human empathy and understanding are still very, very unique. And we still deal with an immense shortage of people to help out there.
So if you can take the labor that used to do the thing automation replaces, and financially and training-wise and fulfillment-wise have that person go off and do these other things, then you’re net ahead. But you can’t just give up that income tax, because that’s part of how you’ve been funding that level of human workers.
So... robot tax! And news comes to us from California that activists and lobbyists are taking up Gates's lead. Wired's report tells of the work of Jane Kim, who has launched Jobs For The Future Fund, which explains its mission here:
The Jobs of the Future Fund is an education and outreach program to build support for a common-sense idea – as workers are displaced, the companies continue to pay a portion of the lost tax into a fund that can then be used for education, retraining and targeted investments in new industries. This modest tax will help smooth the transition for our workers, providing them with better opportunities.
There's expected pushback on the idea:
Not students of the field agree that this new automation will cripple the workforce. “These are new technologies, they're different technologies, but it's not clear that that means anything,” says Dean Baker, a cofounder of the Center for Economic and Policy Research. “There were many fewer people needed to build a car in ‘73 than there were in ‘47, but yet there wasn't mass unemployment.”
This wave of automation is fundamentally different, though, because it’s about software in addition to hardware. The rise of AI means that even white-collar jobs may not be safe. (Think about how repetitive your job is, and how easy it would be for a really smart machine to do it.)
Where's the debate in the UK? This KPMG article explores it from a very practical angle - how it might affect National Insurance Contributions. Watch this space.