Robots are taking our jobs – should they be paying our taxes as well?

In a world where vehicles drive themselves, drones deliver packages, and auto-sentries have replaced security guards, humans may be out of a job.

Silicon Valley and other global tech hubs continue to churn out labour-saving technology that was once unthinkable.

Fears are growing about a tsunami of tech-driven unemployment. Research from Oxford University suggests half of all US jobs could be automated within 20 years. Even white-collar jobs, like those of radiologists and lawyers, are at risk. In theory, any task that is routine and repeatable, as opposed to creative and intuitive, could be affected. If this is true, it’s time to look beyond the workplace for other solutions to keep society functioning.

One solution is universal basic income, whereby the state gives everyone enough money to meet their basic needs. Another is a ‘robot tax’, an idea supported by several prominent people, notably Bill Gates and economist Robert Shiller, a Nobel Prize winner.

The case for a robot tax goes like this. Robots take away jobs that are crucial for income and a cohesive society. We need the taxes that people pay on their wages to meet the costs of, say, new roads. If people aren’t paying for hospitals and schools, the companies that swapped them for robots should.

Moreover, taxing robotisation would probably slow its progress, as the cost differential between employing a human and machine would narrow. And such a tax could help reduce income inequality, a particular problem in major cities, where the gap between people affected by technology and those unhindered by it is growing.

San Francisco is the first major US city to set up a working group to consider a robot tax. “We need to think about investments in our society that don’t exacerbate the wealth and income gaps that we already see today,” Jane Kim, a city supervisor in San Francisco, recently told Fast Company.

The case against taxing robots is multifaceted, however. Critics argue that we shouldn’t get in the way of progress and distort the functioning of the marketplace. Another argument is that fears about unemployment are unfounded: history shows that, although technology eliminates some jobs, it creates others, so people who lose their jobs to robots could end up working on them.

Furthermore, defining exactly what a robot is and who should be taxed could be difficult. Automation comes in many forms, not all of them fitting the view of a robot like R2-D2 doing exactly what a human used to do. Machines may allow workers to do something else in the office or factory, and the effect may not be entirely negative.

Automation may lead to someone retraining and finding a better, safer job over time, say. These problems, and others, were enough to derail a proposal by Luxembourgish politician Mady Delvaux, who called for a robot tax to pay for universal basic income in a draft report to the European Parliament last year. But it’s still early days. We can expect more people to call for robot taxes in the future, especially if automation really does result in significant job losses, and governments start to loser tax revenues.

As published in the September/October issue of Accounting Technician magazine. 

William Sturridge is a tech journalist based in San Francisco.