Bill Gates Proposes a Robot Tax

Discussion in 'West Mall' started by Musburger1, Feb 20, 2017.

  1. Musburger1

    Musburger1 2,500+ Posts

    What's the world coming to?

    https://qz.com/911968/bill-gates-the-robot-that-takes-your-job-should-pay-taxes/

    Robots are taking human jobs. But Bill Gates believes that governments should tax companies’ use of them, as a way to at least temporarily slow the spread of automation and to fund other types of employment.

    It’s a striking position from the world’s richest man and a self-described techno-optimist who co-founded Microsoft, one of the leading players in artificial-intelligence technology.

    In a recent interview with Quartz, Gates said that a robot tax could finance jobs taking care of elderly people or working with kids in schools, for which needs are unmet and to which humans are particularly well suited. He argues that governments must oversee such programs rather than relying on businesses, in order to redirect the jobs to help people with lower incomes. The idea is not totally theoretical: EU lawmakers considered a proposal to tax robot owners to pay for training for workers who lose their jobs, though on Feb. 16 the legislators ultimately rejected it.

    “You ought to be willing to raise the tax level and even slow down the speed” of automation, Gates argues. That’s because the technology and business cases for replacing humans in a wide range of jobs are arriving simultaneously, and it’s important to be able to manage that displacement. “You cross the threshold of job replacement of certain activities all sort of at once,” Gates says, citing warehouse work and driving as some of the job categories that in the next 20 years will have robots doing them.

    You can watch Gates’ remarks in the video above. Below is a transcript, lightly edited for style and clarity.

    Quartz: What do you think of a robot tax? This is the idea that in order to generate funds for training of workers, in areas such as manufacturing, who are displaced by automation, one concrete thing that governments could do is tax the installation of a robot in a factory, for example.

    Bill Gates: 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 what the world wants is to take this opportunity to make all the goods and services we have today, and free up labor, let us do a better job of reaching out to the elderly, having smaller class sizes, helping kids with special needs. You know, all of those are things where human empathy and understanding are still very, very unique. And we still deal with an immense shortage of people to help out there.

    So if you can take the labor that used to do the thing automation replaces, and financially and training-wise and fulfillment-wise have that person go off and do these other things, then you’re net ahead. But you can’t just give up that income tax, because that’s part of how you’ve been funding that level of human workers.

    And so you could introduce a tax on robots…

    There are many ways to take that extra productivity and generate more taxes. Exactly how you’d do it, measure it, you know, it’s interesting for people to start talking about now. Some of it can come on the profits that are generated by the labor-saving efficiency there. Some of it can come directly in some type of robot tax. I don’t think the robot companies are going to be outraged that there might be a tax. It’s OK.

    Could you figure out a way to do it that didn’t dis-incentivize innovation?

    Well, at a time when people are saying that the arrival of that robot is a net loss because of displacement, you ought to be willing to raise the tax level and even slow down the speed of that adoption somewhat to figure out, “OK, what about the communities where this has a particularly big impact? Which transition programs have worked and what type of funding do those require?”

    You cross the threshold of job-replacement of certain activities all sort of at once. So, you know, warehouse work, driving, room cleanup, there’s quite a few things that are meaningful job categories that, certainly in the next 20 years, being thoughtful about that extra supply is a net benefit. It’s important to have the policies to go with that.​

    People should be figuring it out. It is really bad if people overall have more fear about what innovation is going to do than they have enthusiasm. That means they won’t shape it for the positive things it can do. And, you know, taxation is certainly a better way to handle it than just banning some elements of it. But [innovation] appears in many forms, like self-order at a restaurant—what do you call that? There’s a Silicon Valley machine that can make hamburgers without human hands—seriously! No human hands touch the thing. [Laughs]

    And you’re more on the side that government should play an active role rather than rely on businesses to figure this out?

    Well, business can’t. If you want to do [something about] inequity, a lot of the excess labor is going to need to go help the people who have lower incomes. And so it means that you can amp up social services for old people and handicapped people and you can take the education sector and put more labor in there. Yes, some of it will go to, “Hey, we’ll be richer and people will buy more things.” But the inequity-solving part, absolutely government’s got a big role to play there. The nice thing about taxation though, is that it really separates the issue: “OK, so that gives you the resources, now how do you want to deploy it?”​
     
  2. Seattle Husker

    Seattle Husker 10,000+ Posts

    Operating the government (Fed, State and Local) with the worlds largest military and entitlement programs cost money. Looking at ways to replace existing tax revenue while limiting the impacts of diminishing tax revenues. The gas tax is a good example of this. It's primary purpose is to pay for road maintenance. The innovation of electric cars has impacted the model in that they still require the same roads albeit now are contributing a fraction of what a combustion engine car contributes. Roads will still be needed in the distant future thus we need to tweak the tax code to pay for them.

    Robots are similar in that they displace what would be a tax paying citizen. I've seen estimates that 70% of all jobs could be automated by machines. If 70% of our total workforce was suddenly unemployed our financial system would crumble overnight.
     
  3. Musburger1

    Musburger1 2,500+ Posts

    That's exactly the problem. But a "robot tax" would largely be passed on to consumers in the form of price increases. And the consumers in this case, would include the 70% of the workforce no longer employed. In which case consumption falls and sales tax revenue shrinks which results in economic contraction.

    Bottom line, Gates "proposed solution" has a lot of problems. First it discourages efficiency by taxing it. Second, it is inflationary as businesses would hike prices to offset the tax.
     
  4. Seattle Husker

    Seattle Husker 10,000+ Posts

    Keep in mind, the initial price decrease of fictional products came when a company was able to move operational expenses (labor) to capital (read: depreciation). In this case, one could argue that the tax code is already incentivizing replacing workers with machines. Yes, I know quality also plays a significant factor.

    Rather than "taxing robots" maybe we need to change the cost accounting rules, specifically asset accounting.

    I'm not saying I support this idea but we need creative solutions to problems being brought on by the influx of technology. We need to remember that ~75% of all manufacturing job losses since 1970 were due to automation, not outsourcing.

    Of course, it's easy to pinpoint the manufacturing sector but that's simply where machine automation started. When teachers and service industry (e.g transportation) workers are replaced then this will start to really jump to the forefront of public issues.
     
  5. Musburger1

    Musburger1 2,500+ Posts

    Of course, it's easy to pinpoint the manufacturing sector but that's simply where machine automation started. When teachers and service industry (e.g transportation) workers are replaced then this will start to really jump to the forefront of public issues.​

    We are probably on the cusp of that transition right now. The model for four-year higher education is about to price itself into obsolescence. The internet has the potential to transmit quite a bit of knowledge nearly free. It's insane to pay upwards of $10-$15,000 per year when 90% of the desired information can be obtained at the click of a mouse.

    The transportation issue is potentially enormous. I read where truck drivers make up the single largest working group in the United States. As a person that commutes daily on Interstate 35, I don't doubt it. If and when long-haul drivers are replaced by automation, we're talking about millions of no longer employed blue collar workers. They will become ex-workers with reduced income and no skills which translate into today's economy. To replace the lost demand resulting from loss of income, the government would have to fill the void which would require more taxes, more debt, or a combination of both. Higher taxes hurt the economy and at some point soaring debt will also bring the economy to a halt. Or so I would assume.
     
    • Like Like x 1
  6. Seattle Husker

    Seattle Husker 10,000+ Posts

    Colleges are already making the online transition. If you take a calculus class from Arizona State's online service there isn't a human on the other end. It's 100% machine driven analyzing your answers to tailor the curriculum for each student. There will come a day when even elementary schools are driven by this model if we can get past the "daycare" aspect of public school.

    You nailed in on our logistics infrastructure. Now is the time to short any trucking industry stocks.
     
  7. BrntOrngStmpeDe

    BrntOrngStmpeDe 1,000+ Posts

    This certainly throws more gas on the fire for immigration issues as well. If we are already going to experience a substantial decrease in the availability and quality of jobs, what does the added pressure of 1MM new immigrants per year do to that equation.
     
  8. Seattle Husker

    Seattle Husker 10,000+ Posts

    Who knows? It could mean that we begin seeing emigration rather than immigration to/from Latin America. We also know that American workers never want to take a step backwards in compensation/lifestyle. So, those laid off truckers will simply not work waiting for the same level of compensation to come along rather than take a lower paying job in a different industry.
     
  9. iatrogenic

    iatrogenic 2,500+ Posts

    Short term disruption. If no truckers are needed, the new generation will have to be trained to do something else.
     
  10. Joe Fan

    Joe Fan 10,000+ Posts

  11. Musburger1

    Musburger1 2,500+ Posts

    And what would that be?

    Look at the graph below. At disagrees with you.

    Beginning around 2000 the labor force participation rate has declined as automation/technology has ramped up. The slight increase from around 2003 to 2007 can be explained by the construction binge resulting from low interest rates and a fraudulent housing boom. We've reached the point that, other than massive debt expenditure or fraud, we can't seem to spur the economy anymore; at least for the average worker.

    [​IMG]
     
  12. mchammer

    mchammer 10,000+ Posts

    Looking at that graph, can we return to the HR policies of the 70's, just like the participation rate?
     
  13. iatrogenic

    iatrogenic 2,500+ Posts

    Government jobs seem to be popular. Maybe the feds could hire more people to sit on their asses and come up with things other people should do.

    Here are the job creators:
    http://blogs-images.forbes.com/stev...undation-Job-Creation-1988-date.jpg?width=960

    Removing government regulations on new firms would be a good idea. Limiting stock buybacks used by management of public firms to boost stock prices would also help. The chicanery managers play of "awarding ourselves with stock options and then buying those shares back at artificially boosted prices" has been an ongoing problem. This may force managers to invest corporate funds into revenue producing projects, which would spur job growth.

    Over the last ten years we lost an estimated 5.1 million jobs to China thanks to currency manipulation and lower wages. We could start a trade war with them to reverse the trend, but that will create some serious problems for the next ten years.
     
    Last edited: Feb 21, 2017
  14. theiioftx

    theiioftx Sponsor Deputy

    Where does this tax stop? Fork lifts replace workers, excel replaces accounting positions, and computers replaced positions in every field.
     
    • Like Like x 1
  15. Mr. Deez

    Mr. Deez Beer Prophet

    To me that's the big problem with this. I can see his point, but this can get out of hand so easily. Furthermore, you'd have huge tax court battles over what is and is not a robot. Like you brought up, is a forklift a robot? That depends on how Congress defines a "robot."
     
    Last edited: Feb 21, 2017
  16. Seattle Husker

    Seattle Husker 10,000+ Posts

    The primary message is that our tax system has to evolve. Unless we are willing to eliminate entitlement programs and vastly reduce our military spending then we have to evolve our tax system to capture tax revenue in other ways.
     
  17. theiioftx

    theiioftx Sponsor Deputy

    The primary message is that our spending habits must change.
     
    • Like Like x 1
  18. Seattle Husker

    Seattle Husker 10,000+ Posts

    I'd agree but realistically we haven't demonstrated an ability to do that.
     
  19. BrntOrngStmpeDe

    BrntOrngStmpeDe 1,000+ Posts

    I don't know that more taxing or less spending will solve this problem in 50 years. Sure there could always be more things in the future that required service skills but ultimately it looks like we will have a population of 400 million chasing 80 million jobs. That's a recipe for a whole lot of people making minimum wage just because there would be an oversupply of labor. The stagnating wages will be exacerbated by rising costs for everything else. Sometimes these dystopian futures start to seem almost inevitable.
     
  20. Musburger1

    Musburger1 2,500+ Posts

    i think everybody realizes the piling on of debt isn't sustainable, but few people realize what the consequences of slowing it down means.

    Whether the debt goes toward military spending, road repairs, or welfare queens, it all counts toward GDP and ends up circulating into the economy. This new money (debt on the government books) is then spent into the economy on food, clothing, health club memberships, sporting events, etc. once the government makes a cut, the money supply shrinks and the economy contracts. Less tax money is collected. So maybe $10 billion in spending cuts results in $8 billion less of tax revenue. In addition, maybe 100,000 more people are now unemployed. And pissed.

    Cheap energy (easily extracted) is a partial cure for what ails America, but we ran out of that in the late 60's. We still have lots of oil (shale) but it isn't cheap. Merely cutting government spending won't raise the standard of living. It might prolong the viability of the government, but only at the expense of a severe economic contraction.
     
  21. djimaplon

    djimaplon 250+ Posts

    Changing such habits will occur upon market correction, once all alternatives propping up fiat are exhausted.
     

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