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Should We Tax The Robots?

In 1900, at the dawn of the Industrial Revolution, life for everyday Americans was not much different than it was in 1700. Then, gasoline-powered automobiles replaced horse-drawn carriages, and everything changed.

Fast forward a little over a century. In 2030, when driverless cars arrive, the revolution may be even bigger. The same technology that replaces automobile drivers may also replace truck drivers, waitresses, fast food cooks, and a host of other workers, at least according to some.

Bill Gates was one of the first people to suggest a robot tax. At first blush, the suggestion seems outrageous. But upon closer examination, it seems clear that the technology pioneer might be onto something. He certainly has a successful background in this area, so he probably knows what he is talking about.

The Scope of the Problem

Estimates vary widely as to how many jobs will fall victim to technological changes by mid century. Some say as few as 10 percent, and others say it will be more than 40 percent. But the stakes are high. Payroll taxes account for about 36 percent of the federal government’s revenue. Even a slight dip could have significant consequences.

So, we should at least consider a robot tax. It is much easier to get ahead of the problem than it is to play from behind later.

The Mechanics of a Robot Tax

At first, the nuts and bolts of a robot tax (pardon the pun) seem simple. Just levy a tax every time something with artificial intelligence replaces a human worker. But what exactly is a robot?

This theme is a common one in science fiction movies. Star Wars rapscallion Darth Vader is a good example. He was not entirely human and yet not entirely a robot either. If we had to label him as one or the other, which would it be and why?

The question is not just a theoretical one. This issue has also come up in the world of taxes and finances, specifically in the context of Marvel action figures. For years, tariffs for “dolls” were about twice as high as tariffs for “toys.” Marvel argued that Spiderman, Hulk, Wolverine, and its other heroes were not “dolls” because these characters were not humans. They only resembled humans. In 2003, the U.S. Customs Bureau agreed.

So, before a robot tax becomes a reality, there would need to be some ground rules. And considering that film students have written their dissertations over whether Deckard was a human or a replicant in 1982’s Blade Runner, these rules could be extremely complex.

Good Idea or Bad Idea?

Many robot tax proponents point to the aforementioned Industrial Revolution. Back then, automation caused wages to decline for several decades while it fostered significant, and violent, social unrest. Since technological changes are exponential and not linear, who knows what will happen this time, they assert.

A robot tax would not only raise money, these individuals insist. A tax would also slow the AI replacement wave and give society more time to adjust.

Robot tax opponents have plenty of ammunition as well. In addition to the classification and “much ado about nothing” arguments mentioned above, some say a robot tax could backfire and cause more disruption. Companies might leave robot tax countries and go to non-robot tax countries. Moreover, opponents claim, the money would simply shift. Less money for wages means higher corporate profits. So, why not tax them instead?

Whatever changes automation brings, death and taxes will still be the only certain things in life. We’re here to help you cope with the changes.

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