Should We Tax Robots?(news.mit.edu)
news.mit.edu
Should We Tax Robots?
https://news.mit.edu/2022/robot-tax-income-inequality-1221
77 comments
Taxes on non labor things can be used for income transfers and wage subsidies. It's how welfare states were built after industrialization too, taxing industrial production where big capital owned the means of production producing a lot of surplus value.
Those aren’t taxes. They are levies and duties. Which are then associated with subsidies and grants. And they are political choices not economic necessities.
Using one word for two separate jobs confuses matters. English has many words for taking money off people.
Fuel duty and wealth levies do the political job. Taxes do the economic job of releasing resources for the public good
Using one word for two separate jobs confuses matters. English has many words for taking money off people.
Fuel duty and wealth levies do the political job. Taxes do the economic job of releasing resources for the public good
I see it from a different, but quite related, perspective (maybe unpopular in HN as this comes from a left-wing mindset that seems to be outside the Overton window in many places, and particularly in the US).
If things get automated so much that a company ends up being a few guys in suits collecting the profits while the robots do the work, the governments might as well expropiate it. At that point, whatever the company does has been trivialized so much that the usual advantages of the private sector (competitiveness, etc.) become moot. If it also creates no jobs, there isn't really much to lose for the state (and thus its citizens) from expropiating it and using the profits to give citizens a living wage (be it for working or just a guaranteed wage like an UBI).
And then there's no need to tax the robots, the money goes to the state anyway.
If things get automated so much that a company ends up being a few guys in suits collecting the profits while the robots do the work, the governments might as well expropiate it. At that point, whatever the company does has been trivialized so much that the usual advantages of the private sector (competitiveness, etc.) become moot. If it also creates no jobs, there isn't really much to lose for the state (and thus its citizens) from expropiating it and using the profits to give citizens a living wage (be it for working or just a guaranteed wage like an UBI).
And then there's no need to tax the robots, the money goes to the state anyway.
I am really impressed with how you take the generally accepted wisdom of, "the government is less efficient that private industry" and then add if this organisation is so robotically efficient then the logic against governments doesn't apply.
It's an interesting piece in the puzzle of how to make society work when AGI and robots take our jerbs.
It's an interesting piece in the puzzle of how to make society work when AGI and robots take our jerbs.
The wisdom of, "private sector is more efficient than government" only applies when there are market incentives for efficiency: Specifically, there must be competing private businesses to lower costs, and the market consumers must not suffer from extreme negative consequences (e.g. death or homelessness) for refusing to participate.
>"private sector is more efficient than government" only applies when there are market incentives for efficiency
OTOH, depending on the government and the tax rate, the incentive for inefficiency in government itself can overwhelm any existing efficiency or incentive for that kind of thing elsewhere.
OTOH, depending on the government and the tax rate, the incentive for inefficiency in government itself can overwhelm any existing efficiency or incentive for that kind of thing elsewhere.
Then nobody will bother starting new automated businesses – in your jurisdiction, at least. Just like I didn't start a company in my home country, where any reasonably successful business will be “expropriated” (although the beneficiaries will be some oligarch friends of Putin in this case).
No one will start them if no one can buy the products. You are just being a drain on local resources. Few companies produce no waste, no noise, use no electricity, use no water, make no use of roads... and so on. Your company is simply exploiting the land and resources without bringing value to the folks that live there - and that is the point.
Act like you are part of the community and wider world you live in or don't be in business, in other words.
Act like you are part of the community and wider world you live in or don't be in business, in other words.
No one will start them if they are not profitable. [1] So yeah, you can tax those a little bit, but there's some threshold. And starting a business elsewhere is an option for an automated company, so if it's more profitable (or convenient, or reputable) to do it people will do it.
Point in case #1: Delaware. No corporate income tax, favorable court system, and no questions from your business partners have made it the preferred state for US startups nowadays.
Point in case #2: Estonia and its e-Residency program. No corporate income tax, fully digital company registration and management even for foreigners, and absolute minimum of bureaucracy for SMBs (admin time is like 1 hr/year, to fill out an annual report). Not sure why we don't see more companies registered there.
[1]: If you start a business that you know for sure wouldn't bring you profit, you're starting a non-profit :^)
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And of course, in the country you live in, you're also paying income taxes on your salary, and VAT on your purchases. (I'm paying mine all right, in case you're wondering.) I don't like the notion that you must pay taxes to be considered ”bringing value to the community”, but it's not like you as a business owner can avoid taxes completely anyway.
Point in case #1: Delaware. No corporate income tax, favorable court system, and no questions from your business partners have made it the preferred state for US startups nowadays.
Point in case #2: Estonia and its e-Residency program. No corporate income tax, fully digital company registration and management even for foreigners, and absolute minimum of bureaucracy for SMBs (admin time is like 1 hr/year, to fill out an annual report). Not sure why we don't see more companies registered there.
[1]: If you start a business that you know for sure wouldn't bring you profit, you're starting a non-profit :^)
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And of course, in the country you live in, you're also paying income taxes on your salary, and VAT on your purchases. (I'm paying mine all right, in case you're wondering.) I don't like the notion that you must pay taxes to be considered ”bringing value to the community”, but it's not like you as a business owner can avoid taxes completely anyway.
> a few guys in suits collecting the profits while the robots do the work, the governments might as well expropiate it.
i dont think the logic follows.
Those "few guys" are the people who put up the risk capital. If the risk pans out, and they succeed, only to get their reward expropriated, then why would anyone ever take that risk?
Corporate taxes should be sufficient.
i dont think the logic follows.
Those "few guys" are the people who put up the risk capital. If the risk pans out, and they succeed, only to get their reward expropriated, then why would anyone ever take that risk?
Corporate taxes should be sufficient.
Not my downvote, but,
>Corporate taxes should be sufficient.
As we have seen, these type of taxes on predatory corporations are proven insufficient to curtail the predatory activity.
If this was corrected, then non-predatory corporations and ordinary workers would not need to be taxed at all once a jurisdiction had reached a certain level of prosperity overall.
>Corporate taxes should be sufficient.
As we have seen, these type of taxes on predatory corporations are proven insufficient to curtail the predatory activity.
If this was corrected, then non-predatory corporations and ordinary workers would not need to be taxed at all once a jurisdiction had reached a certain level of prosperity overall.
Do you have more background or sources on where this idea comes from?
It seems like this is more just one particular interpretation of a use of tax rather than it being the "one true purpose" of all taxes. I would be interested to see examples of places where this was explicitly the stated aim of a newly introduced tax. From my distant memories of discussing tax in history at school, generally it was to pay off national debt. I suppose one could argue that the debt existed in connection with the public/private manpower point above. And there are plenty of taxes introduced for other stated means.
It seems like this is more just one particular interpretation of a use of tax rather than it being the "one true purpose" of all taxes. I would be interested to see examples of places where this was explicitly the stated aim of a newly introduced tax. From my distant memories of discussing tax in history at school, generally it was to pay off national debt. I suppose one could argue that the debt existed in connection with the public/private manpower point above. And there are plenty of taxes introduced for other stated means.
https://www.elgaronline.com/display/book/9781802208092/97818...
Chapter 1 goes through the monetary accounting
Chapter 9 goes through the tax process.
Chapter 1 goes through the monetary accounting
Chapter 9 goes through the tax process.
> If the robots are making people unemployed, then you don't need to tax any more in the first place. Just hire the people to work for the public good and pay them a living wage.
Where does the money come from to do this? Imagine the extreme where all private work is done by robots. Now only government workers are paying themselves taxes, doing ever less needed work (since robots are now doing so much). And, their taxes have to equal their salary, or the government coffers will soon empty. That doesn’t seem to be a workable solution.
Where does the money come from to do this? Imagine the extreme where all private work is done by robots. Now only government workers are paying themselves taxes, doing ever less needed work (since robots are now doing so much). And, their taxes have to equal their salary, or the government coffers will soon empty. That doesn’t seem to be a workable solution.
The money comes from spending the money.
It’s a simple geometric series that your average 15 year old can do.
You spend £100, that is taxed at 20%, leaving £80 to spend. That £80 is earned as income which is taxed at 20% leaving £64 to spend, and so on.
Like a stone skipping across a pond.
Robots have owners and maintainers. They eat food and live in houses like you and me.
Their choices are the same - spend or save.
It’s a simple geometric series that your average 15 year old can do.
You spend £100, that is taxed at 20%, leaving £80 to spend. That £80 is earned as income which is taxed at 20% leaving £64 to spend, and so on.
Like a stone skipping across a pond.
Robots have owners and maintainers. They eat food and live in houses like you and me.
Their choices are the same - spend or save.
Seems like a strange policy from an economic growth standpoint.
Otherwise the policy is “Why have a robot do something a human can do?”.
Wouldn’t it be better to just put in a workable welfare system and improved wage standards?
You could then even do the opposite and incentivise robots (eg through lenient tax rules on automation capital purchases).
Otherwise the policy is “Why have a robot do something a human can do?”.
Wouldn’t it be better to just put in a workable welfare system and improved wage standards?
You could then even do the opposite and incentivise robots (eg through lenient tax rules on automation capital purchases).
We don't just want economic growth, we want livable communities too. My worry with the above model is it puts a huge economic group at the whim of the welfare system by default, as we are saying that they shouldn't expect to be able to work. That's a huge change, and would rely on a level of fairness from goverment that I have never seen before.
I am pro welfare, pro UBI even, but I think it's a dangerous spot to put our communities in as automation is privatised, and we are relying on it to pay the taxes that pay for the public welfare. Ignoring the farce that is current corporate taxation and assuming again, a level of fairness not seen from corporations either.
I am pro welfare, pro UBI even, but I think it's a dangerous spot to put our communities in as automation is privatised, and we are relying on it to pay the taxes that pay for the public welfare. Ignoring the farce that is current corporate taxation and assuming again, a level of fairness not seen from corporations either.
It just seems silly to me that in a world where we have robots that can screw bolts on a car, and in a world where humans hate screwing bolts onto cars for 40 hours a week, we would want to put a policy that makes the human the more attractive option (notwithstanding that it also raises costs and makes production less efficient).
It feels very similar to the 'cutting grass with scissors' concept - why work in a less-productive way (i.e. ban lawnmowers) just to raise total employment, rather than work in the most productive way possible and then find alternative uses for the humans?
Also the policy is only really useful if the number of humans outstrip the number of jobs available, but we haven't reached that point yet.
You are right that clearly the corporation tax issues will have to be solved, that's a no-brainer.
It feels very similar to the 'cutting grass with scissors' concept - why work in a less-productive way (i.e. ban lawnmowers) just to raise total employment, rather than work in the most productive way possible and then find alternative uses for the humans?
Also the policy is only really useful if the number of humans outstrip the number of jobs available, but we haven't reached that point yet.
You are right that clearly the corporation tax issues will have to be solved, that's a no-brainer.
Most of the reasons for reshoring manufacturing are because of supply chain and strategic concerns. The economic benefits have always been secondary. That's why building manufacturing plants in Mexico is encouraged even when the automation/technology level is very low. The focus on automation has primarily been for the sake of making it cost effective for corporations, supposed benefits to local communities were never a priority. It's been hard enough getting companies to reshore, taxing automation will destroy the past half a decade of progress. Face it, the jobs are not coming back.
If the only think keeping robots out of the workforce is tax or other government incentives you still have communities depending on the government.
I guess the crux of the argument is that dropping public welfare could happen overnight, while dropping the robot tax and refurbishing the factory to replace workers, or just closing down the factory and buying from a supplier that uses fewer workers, would take a bit longer.
I guess the crux of the argument is that dropping public welfare could happen overnight, while dropping the robot tax and refurbishing the factory to replace workers, or just closing down the factory and buying from a supplier that uses fewer workers, would take a bit longer.
> Wouldn’t it be better to just put in a workable welfare system and improved wage standards?
Seems like a great idea, and the companies which get record profits thanks to utilizing automation can be taxed to provide the funds for such a welfare system.
Unless you have an even better trick.
Seems like a great idea, and the companies which get record profits thanks to utilizing automation can be taxed to provide the funds for such a welfare system.
Unless you have an even better trick.
It makes total sense to me.
When we tax someone, are we taxing the human or the work they perform and the value derived from it?
When we tax someone, are we taxing the human or the work they perform and the value derived from it?
>are we taxing the human or the work they perform and the value derived from it?
Yes, all of the above.
Looks more like the robots will be taxing us.
Enforcing too.
Robots are not cheap, somebody is going to be made to pay.
Yes, all of the above.
Looks more like the robots will be taxing us.
Enforcing too.
Robots are not cheap, somebody is going to be made to pay.
> Study suggests a robot levy — but only a modest one — could help combat the effects of automation on income inequality in the U.S.
Pretty sure automation is not to blame for inequality, anywhere. At least not currently.
Pretty sure automation is not to blame for inequality, anywhere. At least not currently.
yeah, also the Gov (all Gov's really) has such a stirling record of redistributing wealth fairly...
Sending payments to every known resident would not be difficult to implement. We already did a fairly decent job during points of this pandemic, and that was with very little preparation (and also an egomaniac who delayed it to get his name on the checks.)
> Pretty sure automation is not to blame for inequality, anywhere.
From the economic perspective of factors of production (labor, capital, natural resources, tech, entrepreneur), more automation means that the same products need less labor and more capital. That shifts both money and influence away from workers and towards capitalists, so that is a quite direct factor that increases inequality.
I mean, the whole concept of capitalists was only enabled by automation during the industrial revolution; previously the main driver of inequality was landholders (nobility) but automation allowed capitalists to overtake them in wealth.
From the economic perspective of factors of production (labor, capital, natural resources, tech, entrepreneur), more automation means that the same products need less labor and more capital. That shifts both money and influence away from workers and towards capitalists, so that is a quite direct factor that increases inequality.
I mean, the whole concept of capitalists was only enabled by automation during the industrial revolution; previously the main driver of inequality was landholders (nobility) but automation allowed capitalists to overtake them in wealth.
>previously the main driver of inequality was landholders (nobility)
It is once again. Have you not noticed that property prices, share prices and rent (things you can collect in your sleep) keep going up and up while wages are in a mild decline?
That's productivity gains being captured.
This fomented the creation of a new jeans-wearing aristocratic nobility driven once again by parasitic wealth extraction.
All automation and productivity improvements are doing is keeping living standards in a relatively stable decline while they keep taking.
Land value tax, property taxes, wealth taxes, building - all of these things would stem the bleeding. There's just one minor issue - they have an absolute stranglehold on government and would vehemently (and, violently, as a last resort) oppose them.
I reckon proposing the idea of an "automation tax" is an elaborate bit of misdirection. Robots are pitchfork immune. The parasitic wealth extraction class collecting rents, dividends and interest in their sleep are not.
It is once again. Have you not noticed that property prices, share prices and rent (things you can collect in your sleep) keep going up and up while wages are in a mild decline?
That's productivity gains being captured.
This fomented the creation of a new jeans-wearing aristocratic nobility driven once again by parasitic wealth extraction.
All automation and productivity improvements are doing is keeping living standards in a relatively stable decline while they keep taking.
Land value tax, property taxes, wealth taxes, building - all of these things would stem the bleeding. There's just one minor issue - they have an absolute stranglehold on government and would vehemently (and, violently, as a last resort) oppose them.
I reckon proposing the idea of an "automation tax" is an elaborate bit of misdirection. Robots are pitchfork immune. The parasitic wealth extraction class collecting rents, dividends and interest in their sleep are not.
Nope. As we don't tax laundry machines or dish washers.
Do we tax robots used in agriculture?
Do we tax robots used in agriculture?
How do we even define a robot for tax purposes?
Is a CNC machine a robot? A 3d printer? An injection moulder with pid control, a cnc box folder, a printer? a coffee machine?
All of these can be considered "computer controlled machines that can displace human jobs".
If the definition of "robot" includes "controlled by a computer" it would be hilarious to see a return to non-computer controls (eg analog, clockwork, punch cards) for tax reasons.
Is a CNC machine a robot? A 3d printer? An injection moulder with pid control, a cnc box folder, a printer? a coffee machine?
All of these can be considered "computer controlled machines that can displace human jobs".
If the definition of "robot" includes "controlled by a computer" it would be hilarious to see a return to non-computer controls (eg analog, clockwork, punch cards) for tax reasons.
Assume you would have to include pure software too.
What's the practical/policy-level difference between a hardware-robot that takes a job away from 3 production operatives and some software-robot that takes away the jobs of 3 entry level data-entry operatives?
(Other than the fact that one is built with gears and motors, and the other is built with silicon and code)
What's the practical/policy-level difference between a hardware-robot that takes a job away from 3 production operatives and some software-robot that takes away the jobs of 3 entry level data-entry operatives?
(Other than the fact that one is built with gears and motors, and the other is built with silicon and code)
The idea of using taxes to discourage efficiency seems to fall squarely in the "broken window fallacy".
https://en.wikipedia.org/wiki/Parable_of_the_broken_window
https://en.wikipedia.org/wiki/Parable_of_the_broken_window
Tax laundry machine... now that's a robot I'd invest in.
Robots to do that kind of work are fine.
Robots that are built in the imagine of the Human mind are not, and should be heavily taxed accordingly. Lest they all be destroyed in a great and glorious Jihad.
Robots that are built in the imagine of the Human mind are not, and should be heavily taxed accordingly. Lest they all be destroyed in a great and glorious Jihad.
How about we tax based on profit-per-employee?
It would have a lot of the same effects, with some added bonuses (such as encouraging companies to have employees on the books rather than contractors)
It would have a lot of the same effects, with some added bonuses (such as encouraging companies to have employees on the books rather than contractors)
Is that really what we want? Do we want a company to rather employee a lot of cheap workers to e.g. produce clothing, rather than have robots doing it?
The only problem is of course the distribution of profits and wealth in the society. _That_ is the problem to tackle.
The only problem is of course the distribution of profits and wealth in the society. _That_ is the problem to tackle.
"No taxation without representation!" We'll see being protested by sentient AI on tax day in the year 2028. Good times ahead fs
I honestly would just rather have an increased GST/VAT/SalesTax across the board, worldwide.
It scales with expenditure, so it taxes luxury.
It arguably hits income disparity more widely than a 'robot tax' or other 'automation tax' would.
It is avoidable (I can choose not to buy something with GST, but I get less choice over income tax)
It's more shelf stable - Out of the box it scales, has precedent and needs little (relative) maintenance, perhaps just a 2.5% +/- adjustment every few years/decade.
It (contentious claim) could be less gameable/evadable/avoidable quite as easily as other taxes can (although of course it is hugely gamed by pushing purchases through businesses, but you could argue that it's better than income tax being avoided in the standard ways)
You don't need to worry about brackets.
(Also, I want this to be complemented by international cooperation on MASSIVE taxation on companies with >$xxx,xxx,xxx profit, taxation on capital, etc.)
It scales with expenditure, so it taxes luxury.
It arguably hits income disparity more widely than a 'robot tax' or other 'automation tax' would.
It is avoidable (I can choose not to buy something with GST, but I get less choice over income tax)
It's more shelf stable - Out of the box it scales, has precedent and needs little (relative) maintenance, perhaps just a 2.5% +/- adjustment every few years/decade.
It (contentious claim) could be less gameable/evadable/avoidable quite as easily as other taxes can (although of course it is hugely gamed by pushing purchases through businesses, but you could argue that it's better than income tax being avoided in the standard ways)
You don't need to worry about brackets.
(Also, I want this to be complemented by international cooperation on MASSIVE taxation on companies with >$xxx,xxx,xxx profit, taxation on capital, etc.)
The problem isn't robots taking our jobs, but the robot owners taking our incomes. The problem is that culturally, we still too often believe that you need to work to eat, and that makes robots doing our work a threat. But surely the ideal future here is that robots do our so we don't have to. For that to be possible, it's essential that everybody benefits from this automation.
Tax to discourage robots is the wrong approach. Encourage robots, but tax the rich in order to divide their wealth more equally among everybody. It shouldn't be considered a problem when someone doesn't have a job. It should be considered a problem when someone can't afford to live and eat, while others have too much.
Tax to discourage robots is the wrong approach. Encourage robots, but tax the rich in order to divide their wealth more equally among everybody. It shouldn't be considered a problem when someone doesn't have a job. It should be considered a problem when someone can't afford to live and eat, while others have too much.
We could cut the BS and actually just tax the companies a much more reasonable amount.
I saw someone suggest that if companies are going to have legal rights like humans then maybe they should be taxed on income like people are. Why can't I claim rent as a tax deductable expense?
Costinot adds: “If you are at peace with some high-level assumptions about the way markets operate, we can tell you that the only objects of interest driving the optimal policy on robots or Chinese goods should be these responses of wages across quantiles of the income distribution, which, luckily for us, people have tried to estimate.”
Seems pretty wonky. Robots have compounding effects, gradually then all at once — and at some point it reaches a watershed moment. Consider the extreme case of putting half or more of the workforce out of a job. Where is the money going to come from to give them a UBI?
Seems pretty wonky. Robots have compounding effects, gradually then all at once — and at some point it reaches a watershed moment. Consider the extreme case of putting half or more of the workforce out of a job. Where is the money going to come from to give them a UBI?
What is a robot? Should we tax dishwashers? How humanlike does a machine have to look to count as a robot?
Or traffic lights? They replaced traffic officers, and while some are timed some take in different signals to make a decision about when to change the light. They are even called "robots" in South Africa.
Or the automated telephone exchanges? They replaced human operators.
Elevator operators were nearly all replaced by robots as well.
Can one robot replace three robots? Would this encourage the building of multi-functional robots over single-task ones, because of lower taxes?
Perhaps the paper describes these in more details, but "You do not currently have access to this article."
Or the automated telephone exchanges? They replaced human operators.
Elevator operators were nearly all replaced by robots as well.
Can one robot replace three robots? Would this encourage the building of multi-functional robots over single-task ones, because of lower taxes?
Perhaps the paper describes these in more details, but "You do not currently have access to this article."
Precisely. And does a factory count as a robot? It can provide a degree of automation and can result in job losses (compared to artisanal production)
What would be the threshold for something to be a robot? Is a dishwasher not a robot? A 3D printer?
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What’s the difference between robots and any other form of capital whatsoever?
Easy for Bill Gates to advocate for this, as he already got rich partly by people automating away lots of jobs using his operating systems and softwares.
Yes, it would definitely be easier to advocate for good public policy around automation while experiencing the benefits of automation. Everyone else should enjoy the benefits of automation too, and even be more free to effectively advocate for public policy of their choosing as a result.
Tax liquidity. You will get full employment regardless of technological progress and the banking system will no longer periodically collapse.
> Tax liquidity
This is essentially the argument for positive inflation.
This is essentially the argument for positive inflation.
Let's not get ahead of ourselves. Right now ChatGPT is likely to hallucinate and forget its own bank account number.
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GST is simpler. Do that.
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porsager(1)
Tax is there, not to raise money, but to move manpower from the private sector to the public sector - in other words to stop the private sector having the money available to issue job offers that bid people away from the public sector jobs we need doing.
If the robots are making people unemployed, then you don't need to tax any more in the first place. Just hire the people to work for the public good and pay them a living wage. They will then buy the output generated by the robots and the robot owners will save the money (because if they were spending the money then everybody would be employed sufficient to earn a living anyway). Increased turnover with existing tax percentages over a spending series then works its magic. Think a stone skipping across a pond.
Robots improve our standard of living. It's bad economics that insists everybody has to have a private sector job that is, perversely, incentivising the private sector to use labour rather than capital.
Ideally next to nobody should be working in the private sector. It should all be done by robots. We'd all then have a guaranteed job at a guaranteed living wage, yet we'd all have everything we want.
The Star Trek economy isn't as far out of reach as we think. It's 20th century economic thinking that is holding us back.