In an interview this week with Bill Gates, he suggested that the use of robots should be taxed more or less equivalently to the humans they replace.
The logic is at first sight appealing and irrefutable. Robots displace jobs that would have been done by humans who pay income taxes, social security taxes and insurances, (depending on where you are in the world). But Robots do not pay any tax at all, ergo, there should be a tax on robots to make up for the government’s shortfall. Added to which, there is the ongoing cost of social security and other safety-nets designed to support people who have fallen on hard times.
Gates raises a fascinating point although it should be said he is not the only one. Many socialist governments have raised the same issue but, in a classic case of ‘poacher turned gamekeeper’, Bill Gates whose inventions such as Excel, have led to swathes of jobs disappearing from the workplace is now seeking to reverse or at least slow the trend.
But the implementation of a Robot Tax (for want of a better phrase) raises significant issues, including, but not limited to,
1. Who pays the tax?
2. What is a robot?
3. Will innovation suffer?
We’ll leave the argument about who pays the tax to the politicians. Should it be the robot manufacturers or the end users that deploy robots? Perhaps it should be both or neither? see below.
The most pressing issues is, what is a robot? In recent months, we have been discussing accounting robots, not physical devices, but Artificial Intelligence (AI) led applications that take repetitive high volume tasks such as reconciliations and certain tasks in the financial close and perform them quicker and more accurately than any human being. But it’s not just AI that is displacing jobs…….it’s automation in general.
The move to the cloud is ravaging IT jobs, collaborative technologies and instant communications are displacing email systems and all the workers that rely on them for their livelihood. Workflows and mobile telephones are displacing clerical workers. So where does one draw the line?
Robots may grab the public’s imagination and the newspaper headlines but the problem is automation in general and it would be discriminatory to impose a tax merely on traditional robots.
And if we tax innovation, where to next? Gates is quoted as saying, “It is really bad if people have more fear about what innovation is going to do than they have enthusiasm”. He believes it is better to tax automation than ban it. But I have news for Gates – the ‘genie is out of the bottle’. Consumers would rather do without new clothes than miss out on the latest iPhone, computer game or app.
And have you seen the latest programmable toys for toddlers? For example, the Fisher-Price Code-a-Pillar to teach programming (robotics actually) to children aged 3 to 8 years or Cubelets® Robot Blocks which “make it fast and easy to engage children as young as four in learning by building robots” or Cubetto “Teach your child to code before they can read”.
The toy industry has a new lease of life thanks to robotics. We shouldn’t be remorseful about the march of progress. Yes, automation may have a social cost but lack of innovation in an increasingly complex and polluted world could be more devastating. Lots of things can be taxed, but it shouldn’t be our creativity.