Bill Gates recently sparked controversy in the Twittersphere for suggesting that robots should be taxed. His argument: As intelligent machines replace human workers, the government will lose the influx of funds from the workers’ income taxes.
Now, I pay my taxes willingly, just like most everyone else. I’m no spokesman for the Howard Jarvis society. But I’ve got a few concerns with taxing robots:
It’s short-sighted. Consider that it was only during World War II when Congress introduced payroll withholding and quarterly tax payments. Is the notion of having to carry the weight of revenue via the income tax – and, as some have suggested, perhaps even the 20th century notion of “the job” as we know it – a historical anomaly?
Not to mention, as my colleague Kumar Sachinanandram recently pointed out, robot-driven productivity leads to higher profits for corporations, which pay higher taxes. Not to mention, he adds, there’s a cost to investing in such technologies, and the development of the intelligent systems themselves leads to more jobs and occupations – and thus more income tax. Spot on.
It’s overly focused on job reduction. While Gates might be focusing on the job reduction aspect of automation, it surely can’t have escaped him that robots are a necessary and needed step on the journey to the future of work – just as Microsoft’s tools have been (it's ironic that I'm typing this on Linked-In, now owned by Microsoft). With the newly intelligent tools of enhancement, businesses, entrepreneurs, students and people could take quantum leaps in the future of their own work. So we should be investing in the new skills people will need to use robotics and add more value than robots can.
At the Cognizant Center for the Future of Work, we have long argued that companies (and countries where companies operate and pay taxes) should use robots as a force-multiplier, not as a wholesale worker replacement. After all, in business, it’s not about the number of people tied to “doing the process”; it’s about outcomes and helping your smart people work even smarter. AI and machines won’t destroy the majority of jobs – it’s the roles and tasks within those jobs that will change and be made far better as a result.
It could impede needed progress. In practical terms – think of your last emergency room experience, or the last insurance claim you filed – improving outcomes through automation and systems of intelligence can’t come fast enough. Why wouldn’t you want to do everything possible to hasten improvements everywhere, in all industries? Rather than trying to hamper innovation, we should be investing in it. We should do that by investing in robotics, and investing in people’s ability to develop and build robots and use them in important work that matters.
I recall a college professor once telling me that before it fell into collapse, the Roman Empire was tantalizingly close to having discovered the steam engine in the 1st century AD; had it come to fruition, one thousand years of the Dark Ages could have conceivably been circumvented, and the Renaissance, the Age of Enlightenment, the industrial revolution, information age and digital era accelerated by at least a millennium.
Take this further – what if the president of the U.S. were to decide that automation is the “poster child” of job destroyers, and sets out to prohibit or substantially tax them? What if AI developers became subject to mob violence? Even if they’re trying to make digital improvements to business and institutions that make life better for everybody? When Renaissance One happened, Galileo had some troubles, if I recall correctly…
It conflates automation with humans. In these days of algorithms, automation and AI, it could be time to remember the concept of “habeas corpus” – not the legal meaning but the literal translation from the Latin: “You shall have the body.” As the band Depeche Mode once sang, “People are People” (and eminently taxable), and, in the words of Mitt Romney, “corporations are people” (and eminently taxable). But are robots people? No … they’re robots! Technology-driven systems are NOT people (although the EU may disagree with me). And that’s where the habeas corpus rule may be instructive.
To use another historical analogy: When you’ve got the automobile available to get from point A to B, who wants to ride in a horse-drawn buckboard, even if it’s the latest and fastest model? And why on earth would you want to suspend habeas corpus, pretend the auto “has a body” and tax it?
It could be self-serving. The Machiavellian may see Gates’ bot taxation idea as nothing more than a shrewd strategy to offset the erosion of software sales when more work is done by robots (which use less software than humans do). It also begs the question of why we don’t tax productivity-enhancing tools – consider that Microsoft Office ostensibly rendered the secretary typing pools of yesteryear redundant. What about a tax-per-blog on the subject of robots? And so on, and so on. Where does it end? Larry Summers make a great point in this article that he “cannot see any logic to singling out robots as job destroyers. What about kiosks that dispense aeroplane boarding passes? Word processing programmes that accelerate the production of documents? Mobile banking technologies? Autonomous vehicles? Vaccines that, by preventing disease, destroy jobs in medicine?”
Let’s Get On with the Future
Bringing this back to a per-person taxation issue, yes, by all means, let’s have an honest debate about tax policy – whether it’s marginal tax rates among the 1% or mechanisms to raise the median wage income. At the same time, we have the power – now – to accelerate people, jobs and businesses to new and better jobs of the future.
Recall the early years of companies like Amazon: Policymakers talked about not taxing the Internet so that, along with e-commerce, it could grow unencumbered. Recall that governments everywhere actually pay you to buy an electric car in the form of a rebate or, where I live in California, let you use the coveted diamond lane in commuter traffic.
Forget taxing bots-as-people. They’re not. Instead, literally, like electric cars and the “information superhighway”: Let’s get the show on the road!