Just Say No To a Robot Tax!

Just say no to a robot tax! It may sound good in terms of protecting the American workers but, its more trouble than what its worth. I explain why in this episode.

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Hi, I’m Jim Stroud and this is my podcast.

Last year, Oxford Economics published research entitled – How Robots Change The World” and among its findings was this quote…

“The rise of robots has already had a profound effect on industrial employment around the world: today, approximately one of every three new manufacturing robots is being installed in China, the world’s great workshop. Our econometric modelling finds that on average each newly installed robot displaces 1.6 manufacturing workers. By 2030, we estimate that as many as 20 million additional manufacturing jobs worldwide could be displaced due to robotization.”

Although, I think, any jobs displaced with robots and automation will usher in new and different work in its place, there are some who see this inevitable transition into a robot future as a threat. And there are some people who see the rise of the robots as an opportunity to raise more money for the government. After a quick word from my sponsors, I will be discussing the pros and cons of a robot tax; an idea that seems to be picking up steam.

The idea of taxing robots has been gaining some momentum as a way of slowing down the spread of automation as a way of protecting American workers. It was an idea that Bill Gates conceptualized and promoted in 2017. Here’s a clip of him explaining his thought.

Those who support the idea of a Robot Tax include New York City mayor – Bill DeBlasio who talked about a robot tax when he ran for President, calling for companies to pay 5 years of payroll taxes for every job automated. Other proponents of the robot tax, more or less, offer these arguments:

  • Business Insider says, “Such a tax could also conceivably create another source of federal revenue in an economy governed by more machines and fewer workers — reducing the possible disruption to the funding structures of Social Security and Medicare, which rely on payroll taxes paid by every worker and to help people find or train for new jobs.”
  • The website Emerj says, “it would slow down the deployment of automation to give society more time to adjust to the possible employment displacement.” In other words, a robot tax would slow down companies adopting automation en masse thus, giving people time to learn a new skill which would make them more marketable in the future. A by-product of that, of course, is that people will keep their existing jobs longer.

Pretty much when I researched this topic, those were the most common arguments for a robot tax. More money for government programs (like Social Security) and it would slow down the automation of jobs long enough for American workers to learn a new skill.  More often than not though, I heard dissenting viewpoints. One of them being from Andrew Yang, a  Democratic candidate for president who centered his campaign around the perils of automation. For example, listen to this clip where he’s discussing some of his campaign experiences. [01:15 – 02:00] Be that as it may, Andrew Yang was not a fan of the robot tax, in a tweet he said this

“A robot tax is an appealing idea but very difficult to administer. Is an IPad at a CVS a robot? How about software that eliminates a call center worker?”

I think Andrew Yang made a valid point against the idea of a robot tax. I found several others. I’ll share just a few of them after this.

Around the time that Bill Gates began promoting his robot tax idea, CNBC interviewed Oren Etzioni from the Allen Institute for Artificial Intelligence, and Martin Ford, author of “Rise of the Robots: Technology and the Threat of a Jobless Future” and together they weighed in on Bill Gates’ “robot tax” proposal as an effort to slow down the spread of automation. Here’s a clip.

A few things to think about, as you digest all of this:

  • With technology everywhere, how do you define what a robot is? How can you determine that a certain software has displaced workers?
  • How do you enforce a robot tax, should it become law? Send IRS agents to analyze all of the software your company uses?
  • Wouldn’t taxing robots slow down innovation and decrease productivity? I mean, why would companies bother to experiment with efficiency if it ultimately means more taxes to pay?
  • And wouldn’t this increase prices for the consumer?

A lot of questions, for sure, and they may seem unanswerable. However, I think we will know the answers very soon. To date, South Korea is the only country in the world with a robot tax. They implemented it in August 2017 so, still early days on how that’s working for them. But if there are any manufacturing companies in South Korea listening, please consider opening up a plant over here where its cheaper because, we don’t have a robot tax.



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