Opinion: Should we tax robots that take our jobs?
Ken makes a living operating a large harvester for farmer Luke. Ken’s salary gets taxed, so it gives income taxes and Social Security payments to the government. Those taxes help pay for government programs for less fortunate people.
However, Luke is about to replace Ken with Nexus. Nexus is a robot that can run the harvester longer, more safely, in any weather, and without lunch breaks, holidays or sick pay.
Bill Gates is an American businessman who became wealthy running computer software company Microsoft. He thinks that Nexus should pay income tax, or Luke should pay a hefty tax for replacing Ken with a robot. Gates thinks it would help with the effects of robots replacing people.
And this “robot tax” should be used to pay a universal basic income (UBI). Gates’s proposal, one of many versions of the UBI idea, would pay money to every person in the country so that no one is poor.
The point of automation, or turning work over to machines, is that, unlike Ken, Nexus will never ask for a pay raise. Nexus doesn't get paid at all, so it also never pays an income tax.
No Instruction Manual
A way to mimic an income tax for Nexus is to use Ken’s last annual income as a guide. Then have Luke pay income tax and Social Security charges equal to what Ken paid.
There are three problems with this approach. For starters, Ken’s income would have changed over time had he not been fired, so the government would need to make up a fake, estimated amount for how much Nexus's pay goes up.
The government tax office and Luke would end up clashing over how much Ken’s pay would have changed, had he kept his job.
Second, new robot-operated machines are coming. They have never been operated by humans. This means there will be no human income to use as a guide for the taxes these robots must pay.
Finally, it is hard to force Luke to pay “income” tax for Nexus but not for the harvester that Nexus operates.
After all, both are machines. Also, the harvester has put far more humans out of jobs than Nexus has. The only cause for treating them differently is that Nexus is more independent.
But to what extent is Nexus independent in a way that the harvester is not? Nexus can be thought of as independent only if it develops consciousness and awareness, on its own or with the help of its makers.
Only if Nexus achieves that leap will “he” have earned the “right” to be thought of as separate from the harvester he operates.
But then humanity will have created a new species. Next would come a civil rights movement for freedom for Nexus. Nexus might gain equal rights with Ken, including a living wage and benefits.
Sales Tax Solution
What about putting a tax on Nexus when Luke buys him? That would, of course, be possible: The state would collect a tax from Luke when he replaces Ken with Nexus.
Gates supports this option to making robots “pay” income tax. He thinks that slowing down automation and charging taxes to counter technology’s effects make sense.
But a one-time tax on robots would only cause manufacturers to bundle robots within other machinery. Robots like Nexus would be put into the harvester to avoid taxes. It would be impossible to tax the robot separately from the parts that do the harvesting.
The problem of separating Nexus and the harvester would make it impossible to agree on how a robot tax should work.
No New Tax, No Complicated Tax Rules
Why make life more complicated than it already is? There is an alternative to a robot tax: a universal basic dividend (UBD), paid for with the money companies make.
When companies offer their stock for sale on the stock market, they are selling shares in their company. Whoever buys them becomes a part owner of the company. Some of a company's shares could go into a special account called a public trust. When the company makes money, everyone in the country would make money. Basically, society would have a share in every company, and the profits would be shared evenly by all citizens.
There would be no new tax, no complicated tax rules, and no effect on how welfare and other social programs are paid for.
In short, forget about taxing either Nexus or Luke. Instead, place a part of Luke’s ownership of the farm in a public trust, which then provides a payment to everyone.
In addition, we must make laws to improve the wages and conditions of working people. Our taxes should provide Ken with new work or unemployment benefits to support him while he looks for another job.
Yanis Varoufakis, a former finance minister of Greece, is a professor of Economics at the University of Athens.