If a robot is going to take my job, should it pay my taxes?

According with OECD, since 1967, the share of men ages 25 to 54 without work has more than tripled, from 5 percent to 16 percent. But the reasons they’re not working have less to do with the rise of the machines than we’re being led to believe. Not only will machines compete for positions, but global population growth and a rather stunted job market will make competition all the more fierce.

But, in spite there are many surveys that help explain causes for the decline in labor participation, during the last years the debate over how Robots will replace our White Collar Jobs has increased and is provoking opposing reactions that can become violent.

Martin Ford, in his new book, Rise of the Robots, argues that AI and robotics will soon overhaul our economy, so we should expect a future with lots of Robots and few jobs for humans.  And Martin is not alone,  there are many experts warning that Robots expected to replace some five million jobs by 2020 ,  Robots will take over most jobs within 30 years, Intelligent robots threaten millions of jobs.

Not everybody is against robots, we find positive reactions defending that Robots Are Coming for Dirty, Dangerous, and Dull Jobs.

If you are asking yourself, Are robots going to steal my job? The answer is, probably.

Is a guaranteed income the solution? Which side are you ?

There are arguments that believe that the solution is to have a guaranteed income that incentivizes education and result in more entrepreneurship. Is this incentive enough for IoT entrepreneurs start businesses? The problem with these types of businesses you can start today is it’s hard to put enough together to generate a middle-class income.

In the other hand, we found many others saying that having a guaranteed income will turn everyone into a slacker and destroy the economy.

Don’t Tax Humans — Tax the Robots

The substitution of human workers by robots has multiple tax impacts. Human employment reduction will reduce payroll taxes, unemployment taxes, and all employee-related benefit costs.

A robot can work 24/7, excluding time allocated for repairs and maintenance, and doesn’t need time off. Multinational corporations that utilize robots at a particular location generally will pay less income tax compared with other locations that do not utilize robots to the same extent.

It certainly surprised me to read don’t tax humans any more at all. “Humans are here to enjoy our lives; robots are here to serve us. As a society and as a species we’ve built infrastructure, machines, and computers to do our bidding”.

Here are three ways the author suggests to shift the tax burden to robots:

  1. Robotic Gains Tax – A “Capital Gains Tax” is basically the same as a Robot Gains Tax. If a legion of robots last year created 10,000 widgets and this year makes 20,000 widgets, the “Capital Gains” would be 10,000 widgets.
  2. Robotic Corporate Taxes – Robots are largely owned by corporations, not by individuals or families. Hence a corporate tax is essentially a tax on the automated algorithms and robots owned by that corporation. Unfortunately a corporate tax rate is also seen as a “tax on rich people” when it is really a tax on robots. It has been falling for the past few decades.
  3. Robot Financial Sales Tax – When humans buy clothes, groceries, gas, etc they pay sales tax, but when a high frequency trading algorithm buys and sells a trillion shares of stock A or B in one day, it pays nothing. This is sheer insanity. Today all business is based on technology, the sale and purchase of stock is an expression of the value of the robots and algorithms that largely run and do the work of a company. It makes sense we should have a sales tax on stocks, bonds, and fancy ‘exotic’ derivatives that these robots are slinging around every day.

The European Union concerns – EU moves to Tax Robots as “Electronic Persons”

If robots are going to steal human jobs and otherwise disrupt society, they should at the very least pay taxes.  That’s the takeaway from a draft report on robotics produced by the European Parliament, which warns that artificial intelligence and increased automation present legal and ethical challenges that could have dire consequences.

European Parliament consider “that at least the most sophisticated autonomous robots could be established as having the status of electronic persons with specific rights and obligations.” This would saddle corporations with the responsibility of paying social security for their robots, just as they would human workers.

Under the EU plans, bosses would be required to pay social security on their robot workers’ behalf, as well as adhere to new taxation rules and legal liability frameworks. The robots aren’t going to have any money so we obviously cannot tax them. So, what is being said here is that companies which employ robots should be charged higher taxes for doing so.

It’s notable that one of the few parts of Europe to protest this move is the one that’s doing best out of automated manufacturing. Is this nonsense?

Industry 4.0 tax discount

Automation is an alternative to companies attempting to cut production costs by moving operations offshore. And this is the key argument for the Italian Government to invest part of the € 13 billions in the Industry 4.0, the tax discounts are the backbones of plan.

The German government is investing €200m to spur Industrie 4.0 research across government, academia, and business. And could it not be otherwise , other EU countries are following.

Industry 4.0 could open up major opportunities for manufacturing, some of which might qualify for R&D tax relief.  This will be particularly beneficial to SMEs, as they have the potential to build new industry 4.0 processes from scratch.

It seems contradictory to me that EU is promoting tax benefits for companies investing in robots to automate factories (less human jobs) and they want to these robots pay taxes to compensate the loss of jobs.

It’s not man vs. machine yet

Robots will certainly take many blue collar and white collar jobs, but If machines can do all the work or even 50 per cent of the jobs that we used to do, what will humans do?

The risk we are facing in the near future is mass unemployment for some categories of workers, combined with lack of skills in other categories – and the political and social implications of such imbalances.

It is not enough that our governments create policies to make sure people are educated, trained, and ready for the new jobs being created.  Society needs to confront this question before human labor becomes obsolete.

The European Union is trying to create a law concerning the rise of the robots as they come to steal jobs. Researchers at Universities are suggesting to have a guaranteed income. We do not know what the solution.

“It’s not man vs. machine yet”

Instead of wringing our hands and blaming technology, we should be rolling up our sleeves to ensure that people who lose their jobs to technology are being retrained. This also requires patience — recognizing that it will take time for these workers to be reemployed in higher-skilled jobs.

And my robots, will also pay taxes?

Have you think, How will be our life as retired workers in the Smart Cities we are building?.

I do not doubt that Robots will help us to live a better life. Just read how Internet of things set to change the face of dementia care .

I can not predict when, but many of us will share our houses of the future with robots, so should I start worry if my robots will pay taxes?


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