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Is it time for a tax on robots?

Oliver Lemon explores what a 'robot tax' could look like, and whether it's an idea whose time has come.

December 20, 2017
8 min read

A robotic arm at the International Space Station. IIP Photo Archive

‘The acquisition of wealth is no longer the driving force of our lives. We work to better ourselves and the rest of humanity.’ – Jean-Luc Picard, Star Trek: First Contact

A new wave of automation is coming – this time using complex machines which can sense their environment and act autonomously to change the world around them: robots. For example, a driverless car is a kind of robot, which might soon (if you believe the hype) make some transport jobs obsolete – and there are also many robots and artificial intelligence (AI) systems without physical bodies – for example automated telephone agents, which are already replacing some  human jobs.

Many developers of robots and AI believe that they are creating fantastic new technologies that will assist people, make life easier, and lead to a more open and fair society. This is the utopian vision where human capabilities are augmented by machines, and human creativity is accelerated by technology. But there is another aspect to such advances, one where human tasks are carried out more efficiently by AI and robotics, so that human workers can be removed, industry costs slashed, and productivity increased, without much consideration of the social or human costs of automation.

Throughout history, many human tasks have been automated – think of power looms and printing presses, washing machines, automated supermarket checkouts, and ATMs, for just a few examples – and these have certainly relieved us of some hard work and drudgery. However, they have also relieved many people of their everyday ways of making a living. Indeed, the pace of automation is ever-increasing. According to a 2013 Oxford study, 47% of jobs, including some  traditional white-collar professions, are at  risk of automation within the next 20 years.

This presents a problem not just for the replaced workers, but for the government; as when people aren’t earning, they also aren’t paying income tax. Thus, automation threatens to deplete the public purse. Perhaps then, it has been suggested, robots should pay income tax, similar to human workers, or there could be a tax paid for replacing a human with a robot. There are several ideas at play here, ranging from taxing a robot or AI system as if it were a human employee, to raising corporation tax, perhaps in relation to a degree of automation of an industry.

From a purely theoretical standpoint, there is really nothing special about robots and AIs which means that they should be taxed when, for example, washing machines, call routing systems, and electronic checkouts  are not.  Robotics and AI is simply another wave of automation. However, it is the potential breadth and depth of this new wave, and its capacity to perhaps one day render many of today’s jobs obsolete, that is leading many thinkers to call for a ‘robot tax’.

Bill Gates, for example, has argued that a robot tax is needed to offset the social cost of automation – perhaps using the revenue generated to establish a universal basic income, or provide more funding for education to re-skill displaced workers.  Other proponents of such ideas include Elon Musk (of Tesla) and Stephen Hawking. ‘People will have time to do other things, more complex things, more interesting things,’ says Musk.

Hawking has said: ‘The outcome will depend on how things are distributed. Everyone can enjoy a life of luxurious leisure if the machine-produced wealth is shared, or most people can end up miserably poor if the machine-owners successfully lobby against wealth redistribution.’

Counterarguments to the idea of a robot tax come from those such as EU Commissioner Andrus Ansip, who thinks that it would be  a tax on progress, and will slow technology development down, thereby actually reducing the potential growth in workers’ leisure time.’So, a major challenge for today’s politicians is  how to handle ever-increasing automation and how to plan long-term for the reskilling and reducation of workers.

Something like a robot tax has in fact been adopted in Korea in a recent tax law revision, the Moon Jae-in government  said that it will now reduce the tax deductions that were being provided to businesses for infrastructure investments aimed at  improving productivity. This will effectively increase taxes for businesses which  invest in automation.

At the moment, it seems that technology is in danger of  driving inequality, rather than rebalancing society.  Some of today’s companies seem to be using automation (including robots and AI systems) without due consideration of social impacts – often using automation to become ever-more  wealthy, while human workers become increasingly under-employed, driven into the ‘gig’ economy, and are sometimes even rendered obsolete. There is a huge challenge today  to turn this situation around. For inspiration about a different, and more utopian view of the future,  we can find some attractive visions  of society such as those in Iain M Banks’ Culture novels, or the TV show Star Trek, where post-scarcity economies allow all people to fulfil their potential.

In his 2017 speech to Labour conference, Jeremy Corbyn did not explicitly call for a ‘robot tax’, but he set out a vision of raising corporation tax to pay for life-long learning. He said, ‘We won’t reap the full rewards of these great technological advances if they’re monopolised to pile up profits for a few. But if they’re publicly managed – to share the benefits – they can be the gateway for a new settlement between work and leisure. A springboard for expanded creativity and culture.’ Perhaps he has been watching Star Trek. But several reports, such as the RSA’s recent Age of Automation, agree  that taxation should  be used in order to counter the socially problematic impacts of mass automation – and other robotics and AI studies have made similar recommendations.

One thing is certain, the UK needs to invest and educate in order to keep up with the rest of the world in robotics and AI. Historically, the UK has been at the forefront of this research – Alan Turing’s foundational work being the kick-starter for all of the progress we have seen in computer science and AI since the second world war. But we will need to invest and work hard to retain our world-class research and innovation — for example Japan is investing $161 billion in AI and robotics, and this environment will become even tougher if we lose-out on European funding and cooperation after Brexit.

There are going to be many fascinating, creative, and rewarding  jobs in AI and robotics, not only for engineers and mathematicians, but for psychologists, linguists,   philosophers, and artists, designers, and writers, as we create a new society where the benefits of automation are shared. To make this happen, something along the lines of a robot tax – more likely a tax related to new automation – will be needed in order to invest in lifelong education and national R&D projects, as a first step towards sharing  the benefits of AI and robotics for all.

A compromise position could be to share the benefits of AI and robotics between businesses and workers in a transparent way, making it clear to the public how the advantages of the new robots and AI systems they will  see appearing around them are being shared. For example, half of the cost reductions achieved by automation in a company or industry could go to the business itself and to research (thereby still encouraging progress), while the other half could be committed to investments in education and training which mitigate the negative social effects of automation. While this is perhaps a simplistic first proposal, this debate now urgently  needs to be carried out in public, so that a new social contract can be established between businesses, people, and robots.

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