Can a ‘Robot Tax’ Solve Automation’s Job-Killing?

For years, pundits have argued that increased automation will eventually eliminate millions of human jobs. How should society deal with the resulting disruption?

Microsoft co-founder Bill Gates has an idea: tax the robots that replace humans. “If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level,” he said in a video posted by Quartz. In his mind, such a tariff would help society to smooth the harsher aspects of a broad transition to automation; humans could then focus on tasks that demand human creativity and empathy, such as caring for the elderly and children.

“You can’t just give up that income tax because that’s how you’ve been funding that level of human workers,” Gates added.

Other tech luminaries believe that automation will force society to institute some sort of universal income or safety net. “There will be fewer and fewer jobs that a robot cannot do better,” Tesla CEO Elon Musk recently told an audience at the World Government Summit in Dubai. “And if my assessment is correct and they probably will happen, than we have to think about what are we going to do about it? I think some kind of universal basic income is going to be necessary.”

Automation and robotics may also lower the cost of living. “Almost everything will get very cheap,” Musk said. “I think we’ll end up doing universal basic income. It’s going to be necessary. The much harder challenge is, how are people going to have meaning?”

Is Universal Income Possible?

But the cost of providing a guaranteed income, with no strings attached, to every citizen of a country is an expensive proposition. In June 2016, a Bloomberg article estimated that paying out $12,000 a year to 225 million U.S. adults would cost $2.7 trillion. (According to the HHS Poverty Guidelines for 2017, the poverty line for a single-person household is $12,060.)

For argument’s sake, let’s say a government is willing to devote most of its annual revenue to a universal-income program that pays its citizens enough to survive on. As FiveThirtyEight pointed out a few months ago, determining eligibility and suitable income targets would still prove extraordinarily complicated issues, especially for legislatures that have problems deciding on even relatively simple matters.

Whatever the eventual solution, automation and robotics will likely begin affecting more industries in the near future. For example, Otto and other tech startups are researching and building self-driving trucks, which, if implemented broadly, would potentially decimate the market for human truck-drivers (one of the most common jobs in every state). This debate is coming, whether we want it or not—and a “robot tax” might not be the only solution.

4 Responses to “Can a ‘Robot Tax’ Solve Automation’s Job-Killing?”

  1. Mr. Gates is not apparently fully about what he said; his nervous laugh and head scratch at the end of the clip was revealing. While I think he might actually believe the idea, he by no means believes his contemporaries believe it, and neither do I. The primary objective of automation is to reduce, offset, or eliminate cost elements of labor. Historically, very little has been done to help workers displaced by automation and technology except to urge them to retool and find something else to do somewhere else. Good luck with that, man!

    Sadly, it seems, retooling means learning how to operate a cash register, flip burgers, or learning to properly fit one’s orange apron. This sort of retooling carries lower hourly rates, few scheduled hours, and all with no benefits. Executives, and owners pocket the savings and profits from increased productivity achieved with fewer and fewer laborers. I see no reason to believe that this pattern will change, nor perhaps should it.

    As a potential solution for automation job killing, a  robot tax seems like a bad idea out of the gate. After all-who needs more taxes? A UBI does not seem practical as there is no way to pay for it that is not actually a tax on someone. I am still learning about UBI and its potential. My gut sense is that UBI is probably not a remedy to automation job killing. Perhaps a fundamental economic shift is necessary to address the eventualities of a world where automation eats more and more jobs.

  2. Anon A. Mus

    “Tesla CEO Elon Musk recently told an audience at the Word Government Summit…” Word Government summit? I think you misspelled “Word”. We’re talking about a summit of government from all over the globe. It should “Words”. 😀

  3. Anon A. Mus

    “Tesla CEO Elon Musk recently told an audience at the Word Government Summit…” Word Government Summit? I think you misspelled ‘Word’. We’re referring to summit of governments from all over the planet. It should “Words”. 😀

  4. BC Shelby

    …I don’t see how this will solve much of anything. The fact that corporations already have low tax rates (likely to be reduced even more under the current administration) the will not have to pay into benefits like healthcare, retirement, training, Unemployment Compensation, and amenities for human workers, any tax burden would still be offset by operations savings.

    For a Basic Income to work it would need to vary from region to region so no “flat rate” could be applied. Basic living costs for someone in say San Francisco CA are much higher than for someone in Baton Rouge LA. Here in Portland OR to rents alone are skyrocketing to unaffordable levels for most workers to the point that even a 15$ an hour wage (31,200$ or nearly 2/3rds more than the suggested Guaranteed Income in the article above) isn’t sufficient to get the median rent here below 50% of monthly income.

    Poverty rates need to take into account regional and local living costs. The only roof over the head 1,000$ a month would get you here in Portland is that of a homeless shelter (if it is not already full). As many workers in low wage, non and semi-skilled jobs would be replaced by automation, there wouldn’t be much to go around for people without a college degree to supplement the 1,000$ a month stipend. Social programmes such as SNAP, TANF, and Section 8 would actually have to be expanded, costing the government far more not only in pay outs, but administrative costs. Given the atmosphere in the current Congress and White House, I don’t see that happening any time soon.

    Now if a Basic Income were tied to a a government sponsored retraining programme designed to move people out of shrinking and dead end labour markets into growing ones like technology related occupations,then we might be onto something. However for this to work, the stigmas of ageism (which is becoming more prevalent particularly in the tech sector) along with colour, and gender discrimination also need to be eliminated.