Why Taxing Robots Is A Bad Idea

Microsoft Founder Bill Gates was asked a while back in an interview with Quartz about what he thought of a tax on robots. In the interview he seemed to express considerable support for such a policy. He said

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.

He’s absolutely right to identify that almost every industry in the developed world has experienced huge leaps forward in terms of the extent of technical development. The level of complexity and intelligence derived from technology is huge and consequently, the fear that this will result in the loss of large sectors of the workforce is appropriate.

He’s got his finger on a real problem. But he’s profoundly and regrettably mistaken about the necessary solution.

We need to be consistent

The modern economy is almost entirely unrecognisable from where it was fifty of a hundred years ago. Many of the types of jobs which a working man in the early 19th century would have trained in would be entirely unrecognisable to the modern university graduate. Industry upon industry has been replaced by technological innovation throughout history, so why single out robots as the job destroyers as though their crime is any worse than the invention of the printing press, the automobile or the internet?

If for no other reason, it would be incomprehensibly impractical. Even if there was a way of suitably defining the type of technology that destroys jobs in law, it would be administratively impossible to implement fairly.

We need to preserve what works

What’s more, to tax robots would be to undermine the very principles which have resulted in much of the human flourishing which we enjoy today. Innovative economic activity, like that which is allowed for by a free society – by capitalism – is the very activity which has resulted in the production of cleaner energy production, cheaper transportation, more immersive entertainment and easier communication. As the prevalence of more advanced examples of artificial intelligence emerge, they have the benefit to contribute in just the same way to provide economic and social benefits.

Individuals and businesses leverage the capabilities offered by technology to increase output for a given input. This means that more can be produced, faster and cheaper. So by taxing robots, which are simply a part of the broader domain of technology, we would effectively be slowing the unfolding of the kind of progress which we currently spend to much time celebrating.

In addition, a tax on robots is a tax on the growth of the spring from which we all drink. A sufficiently high tax on robots could have a significant impact on the availability of artificial intelligence to be used in the marketplace. It is that marketplace which is the mechanism for driving the quality, capability and availability of the kinds of goods we all consume and benefit from.

We need to embrace change rather than slow it

It is undoubted that many existing jobs will be replaced by the application of artificial intelligence in the coming years. This will happen in the same way that innovation has been replacing employment categories for centuries. However, it would require a considerable leap of faith to assert that we are yet at the stage at which the labour market is not capable of re-moulding itself to suit new types of work that will be required. In other words, the changing dynamics in the employment market, is something to be celebrated, because the bigger picture is one of human progress.

As mentioned above, Gates is right to identify a problem – the short-term impacts of such change. The solution must, therefore, lie in our ability to adapt more quickly to the dynamics of the supply and demand of skills and experience in a modern employment market.

Rather than shooting ourselves in the foot and taxing the very outcomes we need to incentivise, we should be asking how we can equip the next generation with skills that are timeless – the skills that don’t depend on a particular stage of our technological progress. Problem-solving, creativity, collaboration, people management and communication skills, and care skills.

If there was a silver bullet to this problem, it lies in education and in equipping ourselves to be able to adapt to and embrace change – not stifle it.

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2018-12-17T09:44:53+00:00

About the Author:

Tom is a software engineer, digital consultant and cyber-security researcher based in Southampton, UK. He is a published author and writer for a number of organisations, and also serves as a local politician with a particular focus on the use of technology to drive change.

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