Tuesday, February 26, 2019

ANS -- DON'T FIGHT THE ROBOTS. TAX tHEM

This is an excerpt from a NYT article -- I don't subscribe so I cannot get past the paywall, but my friend Waleed kindly posted the link and the excerpt, so here it is.  The novel idea is to tax robots who replace jobs.  
--Kim


https://www.nytimes.com/…/…/tax-artificial-intelligence.html
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"The tax system incentivizes automation even in cases where it is not otherwise efficient," wrote Ryan Abbott and Bret Bogenschneider of the University of Surrey School of Law in Britain, in an analysis of tax policy toward automation in the United States and other rich countries. "The vast majority of tax revenues are now derived from labor income, so firms avoid taxes by eliminating employees."

Daron Acemoglu, an economist at the Massachusetts Institute of Technology, explains that automation often produces benefits of dubious value to the business itself. More important, he suggests that the investment in technologies designed to replace workers has come at the expense of alternative investments that might find more productive uses for human labor. This may help explain the sluggishness in overall productivity growth across the economy.
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What's more, curbing businesses' pumped-up enthusiasm for robots might help mitigate the broader social costs of automation, which has flushed so many workers into unproductive occupations where cheap labor still holds an edge and knocked many more out of the labor force entirely.
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Businesses that use robots to replace workers could also be required to cover the payroll taxes of workers knocked out by automation, as proposed by the technology analyst William Meisel. A tax calibrated according to the ratio of a company's profit to its employee compensation could match the wage taxes avoided by automation. Companies deploying robots could also be required to pay some kind of fee, just as employers that lay off workers must subsequently pay more into the unemployment insurance system.
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We may not want to tax innovation, but there is no reason to subsidize investments that are designed merely to take away jobs. At the very least, a tax on robots would force businesses to think harder about when and where to deploy them.»

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