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It’s time to tax the robots

Preston Gralla | March 8, 2017
That proposal, from Bill Gates, could do much to ease the social strains caused by automation

That is just the beginning of the toll that robots and automation will take on people’s jobs. Research from McKinsey on more than 2,000 work activities for more than 800 occupations found that “currently demonstrated technologies could automate 45 percent of the activities people are paid to perform and that about 60 percent of all occupations could see 30 percent or more of their constituent activities automated.”

In other words, a robot has your job in its cross hairs.

Given all that, Gates’ robot tax idea makes sense. Money from it could help retrain workers or fund the important jobs such as educating children or caring for the elderly that our economy does a poor job of providing. Such a tax, he goes on to say, can even help the innovation economy by ensuring that it gets the kind of public and governmental support it needs in order to thrive. He warns, “It is really bad if people overall have more fear about what innovation is going to do than they have enthusiasm. That means they won’t shape it for the positive things it can do. And, you know, taxation is certainly a better way to handle it than just banning some elements of it.”

Plenty needs to be hashed out about how to tax robots. What, for example, is a robot? Do software and algorithms by themselves count? Should simple automation be considered a robot? How much should the tax be? But all those questions can be resolved.

Many people think that Gates’ proposal doesn’t go far enough. They believe that robots will eventually replace so many jobs that the government should provide a universal basic income to everyone in the country. Elon Musk is a believer, as are many others in Silicon Valley, many liberals, Clinton administration labor secretary Robert Reich, some libertarians including the Cato Institute, and even some conservatives.

We’re far from a time when robots have replaced so many jobs that the government should give us all a check. But Gates is right — it’s time to tax robots for the greater good.


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