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Tech / Innovation

Arguments For And Against The ‘Robot Tax’

In a recent interview, computing pioneer Bill Gates suggested that robots which end up taking over human jobs should pay taxes. Put more specifically, he believes that the companies using AI and robotics to increase automation should face higher taxes, in order to reduce economic inequality and mitigate the dent that widespread redundancies would have on public money. But is a tax on robots really just a tax on innovation?

TechCrunch’s Steve Cousins calls such a proposal “backward,” stating that continuous innovation is an essential component in a robust economy, and that fear-mongering around a so-called rise of the machines is counter-productive.

There is also a lack of general consensus on what, exactly, constitutes robotics, and differentiates this new category of technology from any other appliance. A robot is a “combination of technologies that together sense, evaluate and act to carry out a defined task.” But that could just as easily define a smartphone as an autonomous vehicle — if such a tax were to be introduced, there would need to be a much greater degree of clarity.

“People are naturally anxious about the effects of such technology, but taxation is a better way of allaying these fears than the alternative of banning aspects of it,” writes Malcolm James, Senior Lecturer in Accounting & Taxation at Cardiff Metropolitan University. He acknowledges, however, that “it would take a major paradigm shift in our attitude towards taxation to see it as a possible force for good, rather than simply a dead weight and burden.”

Gates’ argument seems based in the idea that innovation and automation will only serve to reduce the number of jobs available to humans. On balance, new technologies have created more jobs over the last 140 years than they have replaced, according to a 2015 census data report by Deloitte, and AI and robotics are expected to precipitate similar opportunities.

“While these technologies are both real and important, and some jobs will disappear because of them, the future of jobs overall isn’t nearly as gloomy as many prognosticators believe,” says Forrester analyst J.P. Gownder. “In reality, automation will spur the growth of many new jobs, including some entirely new job categories.”

Two industries often cited as most ripe for automation are hospitality and retail, with experiments like chatbot hoteliers and the Amazon Go store ably acting as proof-of-concept. Does this spell the extinction of retail workers? Or will the normalisation of a checkout-free experience actually mean that the human touch takes on greater significance in areas like customer service?

“The definition of work is something we haven’t quite formalised as a society,” says writer and technologist Gemma Milne. “If it’s about doing something useful, then surely volunteering or caring for children and the elderly should count. In the context of mass automation, if robots are to take away our employment then are we to move towards a society where the focus is more on ‘valuable’ work, leaving us to lead better lives?”

In the United Kingdom, London is the city at lowest risk of losing jobs to automation, at 39 per cent; the capital and its surrounding areas currently benefit from lower unemployment rates than the rest of Britain. Northern Ireland is the region with the highest share of replaceable jobs, at nearly 50 per cent, followed closely by the North East and West Midlands. And as automation increases, so too will the wealth gap between the North and South, according to think tank IPPR.

But while sectors facing rising levels in unemployment will need additional support in order to avoid an irreversible rich-poor divide, is taxation the answer?

“Getting companies to pay their fair share of taxes won’t solve the larger societal challenge that automation will eventually displace low-skilled workers, nor would a robot tax,” says Cousins. “Instead, governments should focus on using corporate tax revenues to create free or low-cost education programs to prepare people to work alongside automation. For those unable to find work in tomorrow’s tech-driven society, governments could provide universal basic income or other safety nets for the least advantaged.”

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