Tax The Robots!

These days a lot of people are out of work. A look at the labour participation rate shows that it is dropping and is down to less than 63% in the US.

_{(image credit: Wikimedia Commons)}

There are at least a couple of macro-economic reasons for this: jobs are being exported to developing countries and efficiencies are being gained in developing countries, especially in the area of automation.

The situation is getting serious so what are people to do? How are governments going to fund their programs, especially welfare or the much discussed basic minimum income?

The answer may lie in simply taxing the robots or anything that resembles automation.

Treat an automated process simply like a worker. It is productive and it earns its company money. It should get assigned an "income" and that assigned income should be taxed just like income tax for a human worker. The tax does not have to be high or onerous but I think it should at the very least be there.

The raises some questions. What are the limits? Elevators used to be operated manually by a person, now it is automatic. Doors in hotels used to be opened by a doorman, now they open (or revolve) automatically. What do you tax and what do you grandfather in as something that should be left alone? Money used to be dispensed by human tellers at the bank but now that job is performed by ATMs. Do we tax those?

Do we only tax machines or do we tax computer programs as well? Trading used to be done by stock brokers on the floor now it is down (mostly) by bots communicating with a trading server. The examples are endless.

I don't know the answers to these questions but the debate needs to start.

Closing Words

Automation has clearly decimated manufacturing jobs and it has now started in on the simpler white collar jobs. There is even development of automation for the higher end white collar jobs such as lawyers. If the trends continue, someday almost no one will be working and only those who own the bots will have money.

This is a recipe for an unstable society. Maybe it is time to start thinking about who, or what we need to tax in society in order to preserve and maintain functioning countries.

Thank you for reading my post - Procrastilearner