The only things certain in life are death and taxes. That is, unless you are a robot, in which case neither actually apply. Yet.
Ever since Bill Gates made public his robot tax suggestion, the technology community has been in a state of frenzy not witnessed since C3PO was rumoured to be coming out of the closet. Without doubt, there is logic in his view, but this is set in the context that robots will come and steal all our jobs fostered by an ‘us or them’ perspective, which is simply not the case.
The argument ‘for’ robot tax
Over-zealous fear mongering aside, the worry isn’t that all humans will become obsolete, but that automation will increase inequality (among humans), as is the case in a recent Guardian article that claimed that without introducing a robot tax, we will create more wealth with less labour. Company owners and skilled workers, especially those who tell machines what to do, would be vastly enriched, while everyone else will be working in low-skilled jobs for meagre wages or jumping on the welfare bandwagon.
In one sense, Gates is right that robots are likely to automate a lot of work over the next 20 years. But not to such catastrophic ends given computer automation is actually increasing employment in most industries.
Ignoring all the wider ramifications for one moment, the idea of a robot tax is a bad thing purely because it centralises the money and trusts that somebody, or something, will better deploy those funds elsewhere. You don’t have to look far to find examples of white elephant government projects or councils seemingly deaf to the fact there are more potholes in this country than when Howard Marks was in his pomp. The bottom line is, tax doesn’t mean more money, better invested.
Aside from the issue of spending the money that is collated, the main argument against taxing the robots is that it will impede innovation. A report in the FT suggested that growth in rich countries has slowed markedly in the past decade, indicating that it’s getting harder and harder to find new ways of doing things. Stagnating productivity, combined with failing business investment, suggests that adoption of new technology is currently too slow, rather than too fast. The biggest problem right now isn’t too many robots; it’s too few.
Similarly, the problem with Gates’ proposal is that it’s hard to tell the difference between new technology that complements humans and new technology that replaces them. This is especially true over the long term. Machinery replaced human weavers in the Industrial Revolution but people eventually became more productive, by learning to operate new products, like sewing machines. If taxes had slowed the development of this machinery, the eventual improvements would have come later.
The same FT piece rightly points out that a call for robot income tax is just a call for more corporation tax. But, as we all know, big businesses don’t like paying corporation tax – just ask Google. To the contrary, they claim high corporate tax rates damage economies because they reduce industry competitiveness, undermine fiduciary duties to maximise profits and overlook corporations’ roles in creating jobs in the first place.
So, what is the solution? We’re approaching a time where something needs to be done and, rightly or wrongly, at least Gates is prepared to front a suggestion. But here’s an alternative; Robot Licenses. Robot Licenses should be distributed to the workforce, and by this I mean anybody of working age, like a National Insurance number. Each person has a robot, licenced to their own person. These licences can then be traded on an open, transparent and regulated market.
If, for example, I want to sell a service or product that is delivered or built by robots, then I need to have licenses for those robots. So if I want to use three robots, I need to lease those licenses from three humans, and pay those people for the period of time that I use those robots.
This would mean those that wanted to safeguard their own positions could do so, while those who required robotic assistance could shop around, find the best deal and pay a fair and going rate to acquire the skills they need. While it’s far too early to quantify rates, this approach empowers and puts money back into the pockets of ‘the people’, not huge organisations and certainly not HMRC.
Less tax, more innovation
Gates is right about the need to provide funds to retrain workers and to support them in making these job transitions, but taxing robots will just slow job creation. Automation is creating more jobs than it is destroying and there are better ways than taxing robots to help humans avoid the pitfalls of automation.
Instead of slowing innovation, the government should think about taxing humans less and redistributing the income of robots more.