Opinion
Is It Feasible to Levy a Tax on Robots?
A tax on robots is proposed to compensate those who loose jobs to robots
  ·  2017-04-01  ·   Source: NO. 14 APRIL 6, 2017

(Li Shigong)

Are robots eating up human posts? The answer seems to be "yes" in some manufacturing sectors, as robots have not only led to the disappearance of some posts, but are also forcing lower wages on human laborers. In this situation, anti-artificial intelligence (AI) activists say people can no longer turn a blind eye to the negative effects of automation.

How can the challenges posed to human employment by robots be countered? In a recent interview, Microsoft founder Bill Gates proposed to tax robots. He believes that as human laborers have to pay income tax on their wages, robots that do the same work should also be taxed similarly. These tax revenues could be used to finance training programs that help those who have lost jobs to robots, so that they can acquire new skills and enter new industries.

However, opponents argue that, as part of enterprises' production inputs, robots have already been taxed under the current taxation system. Since the Industrial Revolution, all kinds of machines have been "snatching" jobs from human beings. If robots are to be taxed, does it mean that all kinds of products and machines that help to improve productivity will be taxed? This will undoubtedly hamper industrial innovation and creativity.

No need for a robot tax

Liu Yuanju (The Beijing News): Human wisdom is something that AI can't replace yet. Those who believe that robots can replace human laborers are not familiar with the posts that robots have already filled in.

Let's take doctors for example. This is a knowledge-intensive job with high demand for professional competence. A medical diagnosis is actually a process of collecting patients' information and then making judgments by scouring the existing knowledge base. It's said that the best method for learning how to diagnose and treat a patient is to attach a rookie to an experienced doctor, as the former can assist in searching for relevant materials whenever necessary and in this process improve his or her skills in patient examinations.

AI-based diagnostic systems can search for the largest amount of medical documents and records as well as acquire experience and new knowledge very quickly. Therefore, diagnosing and treating patients will probably be among the first technical posts to be filled by robot doctors. However, the research and development of new medicines, proposing hypotheses and so on, are things that AI will find difficult to do.

With the expansion of the human lifespan, the demand for elderly care services is on the rise. But robots can also find it hard to assume nursing roles. As Bill Gates has said, in areas of education and providing for the aged, where human sympathy and caring are required, there is still a shortage of laborers.

In the long run, when robot workers replace human laborers in physically demanding or highly dangerous jobs, the latter will move to better posts. For example, robots can replace people in some low-pay manual work, enabling human laborers to do more sophisticated jobs. In this sense, to tax robots will delay the automation process in such posts and thus hamper scientific and technological progress. If you prevent robo-laborers from replacing human beings in these posts, it appears that you are fighting to protect their jobs, but actually it's a waste of the most valuable resource: humans.

Of course, the replacement will be a time-consuming process with a variety of challenges. As far as the whole society is concerned, some people will be negatively affected. Human society does not follow the law of the jungle, which means some of the wealth produced by robot workers will be used to help those who are negatively affected by automation.

However, it must be made clear that we mean to safeguard human beings but by no means intend to curb the development of AI technologies. When businesses have made profits through robots, there can be something like a tax on the profits, but not a robot tax.

Li Xiaohua (People's Daily): The proposal of taxing robots intends to reach a balance between the rising productivity boosted by AI technologies and the well-being of human beings, particularly less-educated laborers. If the government gives priority to rising productivity, it should not tax robots, but instead should do more to support AI-related innovation and utilization. If employment is more valued, the pace of automation should be slowed down by the means of taxation.

However, taxing robots is unlikely to prevail in an open global environment full of competition. When the practice of levying taxes on intelligent machines curbs the productivity of a country's manufacturing, its international competitiveness will be weakened, which will in turn lead to shrinking exports and the loss of jobs for workers.

A new round of scientific and technological revolution is sweeping the whole world. The core of the new economy, represented by AI, is intelligent manufacturing. If the pace of AI development is hurdled due to taxation on robots, the losses will greatly outnumber the gains.

Take China for example. Its manufacturing sector is strained by rising labor costs and its comparative advantage in this respect is disappearing. AI technologies are crucial for the upgrading and transformation of China's manufacturing industry. In this sense, instead of taxing robots, the government should encourage new technologies with industrial robots as a priority.

On the whole, whether it is machines or AI technologies, they've all helped to boost productivity and create more wealth for human society.

The innovation of cutting-edge automation and AI technologies deserves greater support. Meanwhile, in order to reach a balance between robotic manufacturing and human employment, the government should also invest a portion of the wealth created by new technologies in vocational training for workers who have lost jobs due to technological upgrading, so that they too can reap the benefits of scientific and technological advancement and economic growth.

A reasonable option

Qiao Xinsheng (Shanghai Securities News): Some Chinese experts argue that taxing robots will hamper the progress of science and technology. Robots are originally and essentially tools, not laborers in the real sense, and thus no taxes should be levied on tools. Their arguments seem reasonable, but there are essentially no differences between the work done by human workers and robots. It seems that to tax robots is to tax tools, but the fundamental issue is over the function of taxation.

The development of AI technologies will make it possible for robots to replace more human workers. Since human workers need to pay personal income tax, robots, who replace them, should also do so. When human workers lose their jobs to robots, their social security benefits will also suffer from the loss. In this case, to tax robots and funnel the collected money into human social security funds will help sustain the whole system. Meanwhile, human laborers will also enjoy the benefits of scientific and technological progress when robots manage to cut the working time for humans.

French economist Thomas Piketty points out in his best-seller Capital in the Twenty-First Century that the biggest plight facing human beings since the Industrial Revolution has been the rising tax burdens placed on the shoulders of ordinary workers, compared to declining burdens on the owners of capital and the means of production. While ordinary laborers are required to pay personal income tax, those who possess capital are exempted from this tax item and able to invest their capital in robotic manufacturing systems that may help them save value-added taxes. This unfairness in the taxation system will result in a widening gap between the rich and the poor.

Essentially, it's not a tax on robots, but on the owners of robots, which means using the capital gains tax as a way to make social wealth distribution fairer. Collecting capital gains tax will gradually narrow the gap by reducing tax burdens on ordinary workers and increasing taxes on investors.

How to fairly distribute the tax burden on ordinary laborers and capital owners is a question that the Chinese Government should also take into consideration. An appropriate increase of ordinary laborers' welfare will help to raise their living standards and remove anxieties.

Taxing robots will help to liberate laborers from heavy work, reduce their tax burdens and social security pressure, and improve their lives. More importantly, it's a way to change an irrational income distribution model to make it more conducive to the reemployment of workers displaced from jobs that have been taken over by robots.

Copyedited by Dominic James Madar

Comments to yanwei@bjreview.com

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