In a recent interview with Quartz, Bill Gates — one of the world’s richest men — said he believes governments should tax companies that use automated robots for their labor rather than humans. This tax would only stand to stifle innovation.
He believes taxing robots will slow the spread of automation and allow the government to fund jobs that are needed and better suited for humans. These jobs are in fields like education and caring for the elderly.
This suggestion stems from recent fears that jobs, namely in sectors pertaining to driving, warehouse work and low-level restaurant work, will disappear due to automation. Because a large amount of jobs face the threat of replacement by machine, Gates believes the government needs to step in to assure the United States economy does not suffer.
In fact, Gates said he believes the economy could even get stronger by stimulating job growth in these key areas by funding these sectors through a robot tax.
While some of Gates’ comments have merit, the solution is not to tax companies for their use of robots. Something will need to be done to ensure economic prosperity for the average American citizen post automation, but stronger alternatives exist. For example, a basic universal income could provide people with money without taxing innovation.
One of the key problems to taxing robots is where to draw the line between a robot, software or even technology we view as conventional today. Job automation comes in many forms and has for many years. Software that buys ads based on online tendencies and other information instead of having people choose where to place ads by hand is just one of the many examples of job-replacement currently happening in ways unbeknownst to most.
It seems that unless you tax every position that now uses technology instead of human labor, it would be impossible to define what would need to be taxed and to do it fairly across the board.
The issue of companies relocating out of countries with this system into others without a robot tax also exists. If the United States had a robot tax and not Mexico, companies would have a financial incentive to move south of the border.
Furthermore, a tax of this nature has the nasty consequence of risking to disincentivize innovation. When asked about this fear, Gates responded by saying “Well, at a time when people are saying that the arrival of that robot is a net loss because of displacement, you ought to be willing to raise the tax level and even slow down the speed of that adoption somewhat to figure out.”
It would be foolish to purposefully slow technological progress when auxiliary solutions can produce similar results and solve the same problems without stunting innovation.
It is good that Gates is considering answers to the looming threat of job automation instead of waiting until after problem worsens, but to tax robots is not the correct answer.
sareynol@umail.iu.edu
