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This reminds me about when Bill Gates make that comment saying that raising the minimal wage could make the cost trade-off of investing in automation worthwhile

This reminds me about when Bill Gates make that comment saying that raising the minimal wage could make the cost trade-off of investing in automation worthwhile [1]. On one hand, people need living wages. But on the other hand, I think we're witnessing what Bill Gates is talking about here. What's the solution? Gates has floated the idea of taxing robots. [1]: http://www.businessinsider.com/bill-gates-bots-are-taking-away-jobs-2014-3

lsd5you 9y ago
He is hardly the first person to make that observation - or even the first noteworthy person. This is a debate as old as economics.
paulsutter 9y ago
But what's a robot? Is a 3D printer a robot? (it has moving parts and builds things) is the Google Adwords code a robot? (it sure makes a lot of money) a quant hedge fund? Do you tax all computers by cost or value produced? Seems simpler to tax companies for making money. EDIT: We won't need middle-manager bots that show each other powerpoints all day. What "robot" would get taxed for the disappearance of that function?
- goodJobWalrus 9y ago
  In this context, I think he really talks about taxing capital (or capital investments that displace workers).
- skummetmaelk 9y ago
  >Seems simpler to tax companies for making money. Only if that money makes its way back to the people who would otherwise have been employed because of the robot tax.
adventured 9y ago
Bill Gates, as noted in your linked article, is against aggressively raising the minimum wage. As with Warren Buffett, he is in favor of raising the income tax credit rather than the minimum wage. It's a radically better solution for improving wages in the near-term. A too-high minimum wage artificially cuts off the supply of who a business can hire, based on what someone's labor is worth to said business (they have to be able to afford the cost of the labor). An increased income tax credit, paid for via higher taxes on the top ~1/3 income bracket, avoids the problem of pricing low skilled labor out of the market and enables businesses to hire a lot more people whose labor isn't yet worth eg $10 or $15 / hour. Taxing productivity is an extraordinarily bad idea. It's up there with taxing every search result or trying to slow down computing productivity by abusively taxing cloud computing or smartphone & PC usage.
elevensies 9y ago
People with immense wealth (Gates, Buffet, ...) are great at coming up with innovative tax schemes to tax anything other than wealth.
- icebraining 9y ago
  Actually, Buffet's idea for quite a while has been that he and the other billionaires should be taxed more. It may be just PR, but that's a different goalpost.
  - elevensies 9y ago
    My understanding of Buffett's tax plan is that it is an income tax. Buffett and Gates both don't need much income proportionate to their wealth, they don't intend to spend/consume their fortune or pass it on to their children. Buffett's plan calls for a lot of other wealthy people to be taxed, but I don't see him doing a taxable transaction on his main holdings, I believe the effect on himself would be minuscule.
    - deleted 9y ago
      [deleted]
    - icebraining 9y ago
      I don't see him doing a taxable transaction on his main holdings How so? Either he passes it on to his heirs or he uses it (selling the stock and realizing gains), both of which are taxable events. Since he has called for an increase on both the capital gains tax and on the estate tax, he'd be affected in any case.
      - elevensies 9y ago
        He will contribute the majority of his wealth to charitable foundations. ( https://en.wikipedia.org/wiki/Bill_%26_Melinda_Gates_Foundation#Warren_Buffett_donation https://en.wikipedia.org/wiki/Bill_%26_Melinda_Gates_Foundat... ). I believe this will allow him to avoid the taxes. I don't have any objection to Bill and Warren choosing strenuously avoid giving their money to the government, and I don't object to what they are doing. What I really object to is Warren advocating for other people's money to pay these taxes and presenting it as if it will affect him but he is such a great guy that he is all for it anyway. To me, he is the kid that is about to get in trouble and is frantically pointing at the other kid and mouthing he did it.

lsd5you 9y ago

He is hardly the first person to make that observation - or even the first noteworthy person. This is a debate as old as economics.

paulsutter 9y ago

But what's a robot? Is a 3D printer a robot? (it has moving parts and builds things) is the Google Adwords code a robot? (it sure makes a lot of money) a quant hedge fund? Do you tax all computers by cost or value produced? Seems simpler to tax companies for making money. EDIT: We won't need middle-manager bots that show each other powerpoints all day. What "robot" would get taxed for the disappearance of that function?

goodJobWalrus 9y ago
In this context, I think he really talks about taxing capital (or capital investments that displace workers).
skummetmaelk 9y ago
>Seems simpler to tax companies for making money. Only if that money makes its way back to the people who would otherwise have been employed because of the robot tax.

adventured 9y ago

Bill Gates, as noted in your linked article, is against aggressively raising the minimum wage. As with Warren Buffett, he is in favor of raising the income tax credit rather than the minimum wage. It's a radically better solution for improving wages in the near-term. A too-high minimum wage artificially cuts off the supply of who a business can hire, based on what someone's labor is worth to said business (they have to be able to afford the cost of the labor). An increased income tax credit, paid for via higher taxes on the top ~1/3 income bracket, avoids the problem of pricing low skilled labor out of the market and enables businesses to hire a lot more people whose labor isn't yet worth eg $10 or $15 / hour. Taxing productivity is an extraordinarily bad idea. It's up there with taxing every search result or trying to slow down computing productivity by abusively taxing cloud computing or smartphone & PC usage.

elevensies 9y ago

People with immense wealth (Gates, Buffet, ...) are great at coming up with innovative tax schemes to tax anything other than wealth.

icebraining 9y ago
Actually, Buffet's idea for quite a while has been that he and the other billionaires should be taxed more. It may be just PR, but that's a different goalpost.
- elevensies 9y ago
  My understanding of Buffett's tax plan is that it is an income tax. Buffett and Gates both don't need much income proportionate to their wealth, they don't intend to spend/consume their fortune or pass it on to their children. Buffett's plan calls for a lot of other wealthy people to be taxed, but I don't see him doing a taxable transaction on his main holdings, I believe the effect on himself would be minuscule.
  - deleted 9y ago
    [deleted]
  - icebraining 9y ago
    I don't see him doing a taxable transaction on his main holdings How so? Either he passes it on to his heirs or he uses it (selling the stock and realizing gains), both of which are taxable events. Since he has called for an increase on both the capital gains tax and on the estate tax, he'd be affected in any case.
    - elevensies 9y ago
      He will contribute the majority of his wealth to charitable foundations. ( https://en.wikipedia.org/wiki/Bill_%26_Melinda_Gates_Foundation#Warren_Buffett_donation https://en.wikipedia.org/wiki/Bill_%26_Melinda_Gates_Foundat... ). I believe this will allow him to avoid the taxes. I don't have any objection to Bill and Warren choosing strenuously avoid giving their money to the government, and I don't object to what they are doing. What I really object to is Warren advocating for other people's money to pay these taxes and presenting it as if it will affect him but he is such a great guy that he is all for it anyway. To me, he is the kid that is about to get in trouble and is frantically pointing at the other kid and mouthing he did it.