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From a policy standpoint, it would be a nightmare to define automation to be taxed. What counts as automation? Should I be taxed when I say "OK Google, remind m

From a policy standpoint, it would be a nightmare to define automation to be taxed. What counts as automation? Should I be taxed when I say "OK Google, remind me to blah blah blah", which theoretically negates the need for me to hire a human assistant to whom I would dictate? Should I be taxed for using a spam filter to sort through my emails and discard the junk for me? Where, precisely, would policymakers be able to draw a clear line between "tax this automation" and "don't tax this automation"?

fxj 10y ago
Taxing robots is easy. Just tax every company with a fixed amount and then give them a tax rebate when they employ humans.
- 6d6b73 10y ago
  How are you going to "fix" that amount? Does every hosting company must pay X amount of $? Or is it based on annual sales? If the latter, It should be fairly easy to open a new company after you reach your sales target.
  - fxj 10y ago
    Tax them e.g. 50% of their revenue. And give them a tax rebate that is the sum of the salary for the human employees. That would be a big incentive to employ humans and still they can make good profit.
    - 6d6b73 10y ago
      Revenue is not profit. Just because company brings a lot of revenue does not mean they can afford to hire people. This would essentially make it pointless to own a company.
      - fxj 10y ago
        It would be like a VAT. Every company would have to pay it. So it levels the field.
        6d6b73 10y ago
        No, not every company. Only companies in the country that taxes automation. Other, smarter, countries would skip that tax and end up with cheaper products. This whole "tax robots" idea would only end with higher prices for products, and it's the people that would have to pay these prices.
- svantana 10y ago
  You didn't tax robots, you just increased corporate tax and lowered tax on salaries. Not saying it's a bad idea, but you're affecting lots of other things than robots with that proposal.
  - fxj 10y ago
    It would tax robots AND have other effects. But what is the reason for the taxation of robots? More (human) people should get jobs and money to spend.
    - nubol 10y ago
      "More human people should get jobs!" Do you mean that the final goal is to end with the automation? Or do you mean new jobs generated because the transformation of the industries?
      - fxj 10y ago
        No i think automation is good. But the distribution of the profits from automation is completely a mess. The population needs money that they can spend for the companies to make profit. So either a taxation like this or a universal income, else the flow of money (and goods and services) is stalled.
        6d6b73 10y ago
        These profits you talk about are not from automation but from product or service. You could tax companies specializing in automation, but how do you define who to tax? If software an automation based product? Taxation won't work, for many reasons. Universal income/welfare system has it's own share of problems, but so far that's the only solution that could be somehow made workable.
        nubol 10y ago
        If you think the automation is good, I guess one of the reasons is because it improves efficiency, then why to incentive a company to hire more humans? Should a company be also subsidized by the government if it's reducing work accidents and reduces energy consumption(when introducing automation)? That subsidies would need to be payed by taxes from companies and citizens. In my opinion the solution should not be to employ humans when a machine can do the job more efficiently, and introducing a new tax it could counter incentivize a company to introduce automation and that's exactly the opposite of whats desired. Since to introduce a new technology requires an investment and therefore risks for the company owners. I think that once it is reached a point that it generates net unemployment, something that has not been the case for previous industrial revolutions, people should be able to reach products and production capacity at lower costs, so to be able to make a living being employed less hours.
Spivak 10y ago
Would you consider taxing automation in current industries with high structural unemployment for the purposes of giving displaced workers the resources to change careers? Or more general if a person or group of people are let go because their jobs were automated then that automation is taxed for X number of years for the same reason.
- 6d6b73 10y ago
  What if that industry is automated because the jobs are dangerous? What if it's automated because having robots do the job allows for more precision, which in turn can save lives (ie medical devices)?
  - Spivak 10y ago
    I don't think it's fair to try split the issue into 'good' and 'bad' automation because in either case there is a displaced worker that needs more resources to change careers than unemployment can provide. If we're going to live up to the expectation that automation will free up labor to work on more useful things then that labor has to have mobility and access to education.
- nieksand 10y ago
  What if I launch a new fast food franchise that uses automation from the start? I never had employees so nobody is being let go. Your proposal would give me a massive advantage against incumbents like McDonalds, since they'd be trapped with either high labor or high tax costs.
svantana 10y ago
Exactly, and nevermind the automation that has been taking place in the last 5000 years or so. Gutenberg's printing press displaced the monks who manually copied bibles -- should printing presses be taxed to parity with human labor, so that printing one page of a magazine costs $100? I find it bizarre that a guy as bright as Gates would support such an unworkable idea.
- mcguire 10y ago
  I rather suspect that "taxed to parity with human labor" is heavily overstating the actual suggestion.
- Old_Thrashbarg 10y ago
  Right it would hypocritical to only apply the tax to new automation. To be fair, we'd have to tax tractors, ATMs and calculators too.
- cjlars 10y ago
  The problem, if there ends up being one, is the speed of displacement. People worry that too much downward pressure on so called 'middle class' jobs will create another 30 year stretch of zero wage growth for a big part of the population, which in turn puts a lot of political pressure on the system to 'do something'. Very hard to say if that will come true though, if automation dramatically speeds up, we would see a surge in productivity. Yet in recent years, we are seeing slower, rather than faster productivity growth relative to the long term trend. Take note that the doomsday jobs predictions implicitly forecast that we'll be making more stuff, using less effort, meaning society will be richer. From a tax policy perspective, a VAT addresses Gate's concerns pretty well.
cjlars 10y ago
A VAT addresses this issue pretty well since it taxes the value add nature of both automation and human labor. If we need to subsidize human labor in order to smooth out the disruption effects of mass automation, then expanding the earned income tax credit with the proceeds from a VAT would work to subsidize the human labor at the cost of mechanical labor in a relatively efficient manner. Since it ties all payments to a specific social security number, there's less concern about politicians playing favorites, micromanaging the system, buying votes with policy, etc.

fxj 10y ago

Taxing robots is easy. Just tax every company with a fixed amount and then give them a tax rebate when they employ humans.

6d6b73 10y ago
How are you going to "fix" that amount? Does every hosting company must pay X amount of $? Or is it based on annual sales? If the latter, It should be fairly easy to open a new company after you reach your sales target.
- fxj 10y ago
  Tax them e.g. 50% of their revenue. And give them a tax rebate that is the sum of the salary for the human employees. That would be a big incentive to employ humans and still they can make good profit.
  - 6d6b73 10y ago
    Revenue is not profit. Just because company brings a lot of revenue does not mean they can afford to hire people. This would essentially make it pointless to own a company.
    - fxj 10y ago
      It would be like a VAT. Every company would have to pay it. So it levels the field.
      - 6d6b73 10y ago
        No, not every company. Only companies in the country that taxes automation. Other, smarter, countries would skip that tax and end up with cheaper products. This whole "tax robots" idea would only end with higher prices for products, and it's the people that would have to pay these prices.
svantana 10y ago
You didn't tax robots, you just increased corporate tax and lowered tax on salaries. Not saying it's a bad idea, but you're affecting lots of other things than robots with that proposal.
- fxj 10y ago
  It would tax robots AND have other effects. But what is the reason for the taxation of robots? More (human) people should get jobs and money to spend.
  - nubol 10y ago
    "More human people should get jobs!" Do you mean that the final goal is to end with the automation? Or do you mean new jobs generated because the transformation of the industries?
    - fxj 10y ago
      No i think automation is good. But the distribution of the profits from automation is completely a mess. The population needs money that they can spend for the companies to make profit. So either a taxation like this or a universal income, else the flow of money (and goods and services) is stalled.
      - 6d6b73 10y ago
        These profits you talk about are not from automation but from product or service. You could tax companies specializing in automation, but how do you define who to tax? If software an automation based product? Taxation won't work, for many reasons. Universal income/welfare system has it's own share of problems, but so far that's the only solution that could be somehow made workable.
      - nubol 10y ago
        If you think the automation is good, I guess one of the reasons is because it improves efficiency, then why to incentive a company to hire more humans? Should a company be also subsidized by the government if it's reducing work accidents and reduces energy consumption(when introducing automation)? That subsidies would need to be payed by taxes from companies and citizens. In my opinion the solution should not be to employ humans when a machine can do the job more efficiently, and introducing a new tax it could counter incentivize a company to introduce automation and that's exactly the opposite of whats desired. Since to introduce a new technology requires an investment and therefore risks for the company owners. I think that once it is reached a point that it generates net unemployment, something that has not been the case for previous industrial revolutions, people should be able to reach products and production capacity at lower costs, so to be able to make a living being employed less hours.

Spivak 10y ago

Would you consider taxing automation in current industries with high structural unemployment for the purposes of giving displaced workers the resources to change careers? Or more general if a person or group of people are let go because their jobs were automated then that automation is taxed for X number of years for the same reason.

6d6b73 10y ago
What if that industry is automated because the jobs are dangerous? What if it's automated because having robots do the job allows for more precision, which in turn can save lives (ie medical devices)?
- Spivak 10y ago
  I don't think it's fair to try split the issue into 'good' and 'bad' automation because in either case there is a displaced worker that needs more resources to change careers than unemployment can provide. If we're going to live up to the expectation that automation will free up labor to work on more useful things then that labor has to have mobility and access to education.
nieksand 10y ago
What if I launch a new fast food franchise that uses automation from the start? I never had employees so nobody is being let go. Your proposal would give me a massive advantage against incumbents like McDonalds, since they'd be trapped with either high labor or high tax costs.

svantana 10y ago

Exactly, and nevermind the automation that has been taking place in the last 5000 years or so. Gutenberg's printing press displaced the monks who manually copied bibles -- should printing presses be taxed to parity with human labor, so that printing one page of a magazine costs $100? I find it bizarre that a guy as bright as Gates would support such an unworkable idea.

mcguire 10y ago
I rather suspect that "taxed to parity with human labor" is heavily overstating the actual suggestion.
Old_Thrashbarg 10y ago
Right it would hypocritical to only apply the tax to new automation. To be fair, we'd have to tax tractors, ATMs and calculators too.
cjlars 10y ago
The problem, if there ends up being one, is the speed of displacement. People worry that too much downward pressure on so called 'middle class' jobs will create another 30 year stretch of zero wage growth for a big part of the population, which in turn puts a lot of political pressure on the system to 'do something'. Very hard to say if that will come true though, if automation dramatically speeds up, we would see a surge in productivity. Yet in recent years, we are seeing slower, rather than faster productivity growth relative to the long term trend. Take note that the doomsday jobs predictions implicitly forecast that we'll be making more stuff, using less effort, meaning society will be richer. From a tax policy perspective, a VAT addresses Gate's concerns pretty well.

cjlars 10y ago

A VAT addresses this issue pretty well since it taxes the value add nature of both automation and human labor. If we need to subsidize human labor in order to smooth out the disruption effects of mass automation, then expanding the earned income tax credit with the proceeds from a VAT would work to subsidize the human labor at the cost of mechanical labor in a relatively efficient manner. Since it ties all payments to a specific social security number, there's less concern about politicians playing favorites, micromanaging the system, buying votes with policy, etc.