Robots, Pay Your Taxes!

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We currently live in a fast and frugal world that is changing and adapting to new measures innovative measures constantly. Most of this comes from advancement in technology and automation to improve productivity, lower costs and efficiently cater to the needs and wants of billions worldwide.

As a result, it is highly likely that over the next couple of decades, robots and technology are likely to dominate industries, as robots are believed to be more productive than their human counterpart. This is likely to affect human income as well as the income the government receives from taxation, including an increase in unemployment.

In a recent statement, Bill Gates has explicitly called for robots to be taxed to make up for this lost revenue to the government and for those who have lost their jobs as a result of increased automation. Furthermore, he believes that taxing robots would slow down the development of technology and automation and that funds raised through taxation could be used to support those workers without a job or be used for retraining, education and healthcare of humans.

Bill Gates was quoted as saying “Right now, the human worker who does $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.

“If you can take the labour 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.”

To a large extent, this statement is quite true.
His comments have come at a time where the world is questioning how robots are likely to change the future and the nature of jobs, particularly those in manufacturing, trade and finance. According to Forbes, steel jobs have seen a decline of 400,000 workers in the last 50 years due to increased automation.

However, it comes as no surprise that companies have been against Bill Gates’ belief, stating it will disrupt technology and innovation. In contrast, economists believe that the uprising of technology and robots could create more opportunities for human capital and make them more productive whereas taxing them could make human capital worse-off.
It is without question that some jobs and employees, such as those in the primary industry, would be displaced as a result of robotic innovation but workers as a whole would eventually benefit in other industries.

ATMs reduced the need for bank tellers but in fact bank tellers increased. Barcode scanners reduced the need fro cashiers but the number of cashiers increased. Most of this is due to increased demand and more so because automation made it easier, quicker and cheaper for them to do their job.
These are some of the examples that refute Bill Gates’ belief that human workers are replaced by technology.

Nonetheless, it may be right to provide funds to retrain workers and to support them in making these job transitions, but taxing robots will just slow job creation. Automation is creating more jobs than it is destroying.

However, there will be winners and losers. Some jobs will diminish and become obsolete and these workers will need new skills in order to adapt to this change. The question remains as to whether this increased automation increases inequality in income and skills in the world and how employers and the government aim to tackle this gap that will be present as technology advances.