Robots

Robot Tax = Protectionism Against Progress

Taxing automation would slow down progress and ultimately make most of us poorer than we would otherwise be.

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RobotHumanNdoeljindoelDreamstime
Ndoeljindoel/Dreamstime

Prophets of the impending automation apocalypse predict that robots will soon take 7 percent to almost 50 percent of all American jobs. Recently, billionaire Microsoft co-founder Bill Gates suggested that the job-stealing robots should be taxed just like the workers they replace. In an interview last month with Quartz, Gates suggested,"Certainly there will be taxes that relate to automation. Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, social security tax, all those things. If a robot comes in to do the same thing, you'd think that we'd tax the robot at a similar level."

Of course, taxing anything means that it raises the price and less of it is produced. For example, if you want to have people use less electricity produced by fossil fuels because you are worried that the carbon dioxide emitted contributes to possibly dangerous climate change, you impose taxes on that. In a sense then, Gates' proposal is treating automation as a negative externality. In fact, automation (and the productivity it enhances) is the key to economic growth. Doing more with less is how people achieve prosperity.

In an insightful op/ed over at The Washington Post, Harvard University economist Lawrence Summers asks …

…why tax in ways that reduce the size of the pie rather than ways that assure that the larger pie is well-distributed? Imagine that 50 people can produce robots who will do the work of 100. A sufficiently high tax on robots would prevent them from being produced. Surely it would be better for society to instead enjoy the extra output and establish suitable taxes and transfers to protect displaced workers. It is hard to see why shrinking the pie, rather than enlarging it as much as possible and then redistributing, is the right way forward.

This last point has long been standard in international trade theory. Indeed, it is common to point out that opening a country to international trade is like giving it access to a technology for transforming one good into another. The argument, then, is that since one surely would not regard such a technical change as bad, neither is trade, and so protectionism is bad. Gates's robot tax risks essentially being protectionism against progress.

Taxing robots will slow down progress and ultimately make most of us poorer than we would otherwise be.

Nevertheless, with regard to the future of automation, Summers seems to buy into the notion that this time it is different. However, there are voices cautioning against dire forecasts of automation making humans economically redundant. MIT economist David Autor makes a persuasive case in which he identifies …

…the reasons that automation has not wiped out a majority of jobs over the decades and centuries. Automation does indeed substitute for labor—as it is typically intended to do. However, automation also complements labor, raises output in ways that lead to higher demand for labor, and interacts with adjustments in labor supply. Indeed, a key observation of the paper is that journalists and even expert commentators tend to overstate the extent of machine substitution for human labor and ignore the strong complementarities between automation and labor that increase productivity, raise earnings, an augment demand for labor. …

Changes in technology do alter the types of jobs available and what those jobs pay. In the last few decades, one noticeable change has been "polarization" of the labor market, in which wage gains went disproportionately to those at the top and at the bottom of the income and skill distribution, not to those in the middle. I will offer some evidence on this phenomenon. However, I will also argue that this polarization is unlikely to continue very far into the foreseeable future.

When considering whether Summers or Autor is right, I come down on the side of Autor. More on why the automation apocalypse is overstated at another time. In the meantime, a tax on robot "labor" is a dumb idea.

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56 responses to “Robot Tax = Protectionism Against Progress

  1. We should just go back to sticking our wooden shoes in the textile machines.

    1. DR(P): Nice. Very nice. 🙂

    2. But who’s going to make the wooden shoes? Are we going to stick them in the machines that make ’em?

      1. We’ll have a machine to make the shoes, and a different machine insert the shoes into all the other machines.

        Bro, do you even robot?

    3. +1 sabot-age

  2. Prophets of the impending automation apocalypse predict that robots will soon take 7 percent to almost 50 percent of all American jobs

    I now use self-checkout whenever I can. $15 now!

    1. “7 percent to almost 50 percent ”

      That’s quite a spread.

      1. It’s called “waffling”.

    2. I’ve found them to be unreliable and avoid them like the plague. I wish it were otherwise.

      1. Our nearest grocer took them out and re-inserted manned registers which, IMO, is anti-logic any way you slice it.

      2. They’ve gotten much better. However, I’ve actually learned to check the product I’m buying for a good bar code. The grocery store where I shop has these hand-packed fruit cups, and the bar codes are printed in the store based on weight, and the stickers put on by hand as well. About 50% of the time there’s a wrinkle in the bar code and then you need the attendant to manually enter a code. Once I started tracking on those nuances, I’m out of the store faster than any checkout lane.

        Also, the amount of groceries I buy is a factor. If I’m buying a half a dozen things, self checkout FTW! If I’m buying a week’s worth of groceries, I want to look my orphans in the eye while they bag my shit.

      3. That’s what you get for trying to ring up a single string bean at a time.

  3. In the meantime, a tax on robot “labor” is a dumb idea.

  4. If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.”

    Bill Gates can, at times, be shockingly dumb.

    1. When you’ve had more money than God for the last generation or so, you can afford to say whatever whacky idea comes into your head without much reflection.

    2. Robots paying into social security, funniest thing I’ve read in a month.

      I can just picture them hanging out in Florida, playing the Del Boca Vista golf course with their pants hiked up to their robot breasts and held in place by a white belt while bitching about their grandbots never coming to visit them. All the incumbent robo-legislatures can scare the aging robo-population with, “if Intel 8700 gets elected he will take away your social security!” The old masses will flock to vote for AMD 7800.

  5. If robots displace existing human labor, can we get some robo-legislators please?

    1. No automation without representation!

    2. Robot comes from Czech Robota which means forced labor ie slave so they only count 3/5ths person for legislators.

  6. You thought we heard some dumb shit over the last 8 years.

    #WARONHUMANLABOR is going to be the most ridiculous, stupid, annoying herd outrage in the history of made up political crises.

    This will make the war on terror look like a blip on the screen.

    1. This will make the war on terror look like a blip on the screen.

      But not the War on Womyn.

      1. We should pit the two sides of these wars against each other.

        After all, if woman are the most important thing on earth and they are smarter and as strong or stronger than any man, then they can beat the terrorists right?

        We should get all of the SLJW involved as well. All these people want a war so damn bad.

        1. As I posted earlier, there is news of a “day without women” protest coming up.

          Can we make it a week or month?

          1. A week is a long time without…..

  7. I cannot wait until the robots displace all of the union scum on earth simply for the entertainment of the months and years of their fight. except for the rioting and killing when they get laid off.

    They will be proven time and again that any machine, monkey, or 2 year old could perform better at the average American union job.

  8. union member = luddite = proggie protectionist

    All imminently corruptible scum. They just don’t know it.

  9. It’s about as dumb as a carbon tax. There is nothing in summers reasoning that indicates that he ends up in a better place. His ‘redistribution’ is just a tax in another form. A “sufficiently high” redistribution will also disincentivize robot producers and purchasers given that they have little expectation of benefiting from their effort if though it would be the patriotic thing to do.

    1. Plus Gates makes some fundamental errors. Why should a robot pay social security? It won’t collect any. In fact, it gets ZERO government benefits. If it gets sick, it’s not covered by ObamaCare, or even the upcoming ConfusionCare.

  10. “Prophets of the impending automation apocalypse predict that robots will soon take 7 percent to almost 50 percent of all American jobs.”

    And not once has ANY explanation for why this will be different from the Agricultural Revolution, where Robots quite literally stole 50% of all American jobs.

    Hmmm. It’s almost like that turned out to not be a problem.

    1. You are very Right. Those damn factories forced all of those lucrative farmers from their paradise toiling in the fields making major bank.

      Its such a stupid theme and total bullshit.

      Does anyone over wonder why people flocked to the cities to work for those evil capitalists? Perhaps they were starving, barely making it? Why do you think farmers all had 20 children? Because half of them died.
      That pesky industrial revolution only doubled the life expectancy in about 50 years.
      Sons a bitches!

    2. Did you not read the article? THIS TIME IT’S DIFFERENT!

      1. That’s a good point. The catastrophists have been hitting the mark flawlessly lately.

  11. All those women taking the day off today. It would be interesting if they came back and had been replaced by a robot.

    1. I argue that most women are already robots.

      They all watch the morning TV talks shows and spout that stupid shit like it is gospel. They do exactly what pinterest and ellen tell them to do. All marketing is angled towards them because they are the easiest sheep to manipulate.

      They have spent my entire lifetime talking about equal rights and objectification of women yet they all have no problem with whore uniforms and fashion that does nothing but objectify women. And I am fine with that but women are mostly either hypocrites or not that smart.

      1. SOMEBODY got he azz dumped!

        1. No. I just live with one.

  12. The first thing we need to do is get them to recognize robosexual marriage.

    1. And a transformer bathroom law.

      1. You’re one of those that’s okay with everyone being exposed to an adult penis while using the floor drain in the garage aren’t you?

  13. However, there are voices cautioning against dire forecasts of automation making humans economically redundant.

    Cautioning *against* dire forecasts?

    But seriously, once you’ve got two people who can do the same job, unless you *need* twice the production, one of them automatically becomes redundant. Pretty much every pastime and recreational activity on Earth is economically redundant.

  14. Certainly there will be taxes that relate to automation. Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, social security tax, all those things. If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.

    And how is a PC not just a quadriplegic robot?

    1. It is a quadriplegic, therefore disabled, therefore eligible for special benefits and tax breaks.

      1. We are going to need cross walks and electronic crossing guards on rural highways in the middle of no where for the robots too.

      2. It is a quadriplegic, therefore disabled, therefore eligible for special benefits and tax breaks.

        And by the same equality token, a PC faithfully emulating the software or virtualizing the OS required to run any given robot without any hardware changes can hold the same job on the production line, right?

        Before my desktop even got a chance to boot as a Windows PC, I had converted it to Linux.

        1. So you’re saying your robot is OS-fluid?

    2. Of vourse, himsns are not ysxed on gheir productivity, but on their income. Robots do not have income and do not desire or need an income so yhere is nothing setti g a base number for that. One gets the impression that you have allegedly smart people trying to find a replacement for something thst they are putting any thou g t into why thing exists in the first place.

  15. Robots are already taxed.

    Businesses pay property tax.

    And the increased earnings are taxed.

  16. 0x90 ; And how is a PC not just a quadriplegic robot?

    That is another very good point. Where are all of the starving people once windows came along and improved everything?

    But, that should be the beauty of the robots is that there wil be no need to tax their production. After all, they will have no income.
    Of course the scum in Washington will try to tax the hell out of the benefits they bring but it will be a loser. The efficiency of the robot world hopefully will afford enough gov’t drugs to keep the thugs and union scum from rioting from sloth.

  17. People do not understand automation. Automation allows us to make more with less, which is how our standard of living increases.

    Should we outlaw industrial machinery and build damns with fucking shovels?

    1. Yes because Jobs!
      Only a greedy banker would want to make things more efficiently and then hatch some scheme to make more products more affordable for the masses.

  18. Here’s my list of top jobs to be replaced by robots:

    1. Teachers (can’t imagine how robots could do any worse)
    2. Police (provided robots are not lethally-armed, it could be good)
    3. Prostitutes (self explanatory)
    4. Child care (would prob. do a better job than most babysitters at making sure kids don’t hurt themselves or others, and would always show up when they say they would)

  19. TERMINATOR collecting taxes is what i got out of this article

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