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States Demur on Call to Tax Robots, but Activists Press for Change

© Krantz News Service, October 12, 2017


California, frequently a trendsetter in policymaking, may soon see legislation specifically addressing the issue of a robot tax to alleviate job loss resulting from automation.

The development comes even as the state's Department of Motor Vehicles has announced proposed regulations allowing autonomous cars without backup human drivers as early as next year. DMV is accepting comments on the proposal through Oct. 25.

Earlier this year Microsoft co-founder Bill Gates called for a robot tax, but no states have seriously considered that yet.

Political developments in California may signal a change. San Francisco Supervisor Jane Kim is looking into a robot tax, and she is also "spearheading a new statewide effort to help prepare California for the Automation Revolution," according to the Jobs of the Future Fund, a Kim initiative.

Organizers at the Jobs of the Future Fund "are still working on ballot language," wrote Julie Edwards, responding to emailed questions. "We have not yet determined timing and will also be working with legislators for potential action via the statehouse."

Lawmakers routinely pass budgets with line items to automate certain government processes, or they pass resolutions to laud student robotics competitions.

But state legislation to address automation's impact on workers by taxing robots has thus far been just a theoretical discussion.

In an interview with Quartz earlier this year, Gates said, "You ought to be willing to raise the tax level and even slow down the speed" of automation.

Asked about a robot tax to train displaced workers, the Microsoft co-founder told Quartz, "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 we'd tax the robot at a similar level."

Prominent voices reacted. The Economist called Gates "an unlikely Luddite." The article, appearing in the Finance and economics section of the print edition under the headline, "I, taxpayer," stated:

"A robot is a capital investment, like a blast furnace or a computer. Economists typically advise against taxing such things, which allow an economy to produce more. Taxation that deters investment is thought to make people poorer without raising much money."

Lawrence Summers, a former treasury secretary under President Clinton and an economic advisor for President Obama, also criticized the robot tax idea: "The Microsoft co-founder is right about the gravity of the problem and need for action," Summers wrote in The Washington Post, "but he's profoundly misguided in his proposed solution -- and in ways that point up problems with the current public debate."

Among other things, Summers noted that such a tax risks shrinking rather than growing and properly distributing, if necessary, the economic pie. He concluded, "Gates's robot tax risks essentially being protectionism against progress."

The Jobs of the Future Fund in California welcomes the discourse. It emphasizes that its campaign is not anti-technology or pro-tax; rather, that it is suggesting a neutral solution: "The idea is simple: if an employer replaces a human worker with a robot or algorithm, he or she would pay a tax. That revenue would then be used to fund job training, education and investments in new industries...

"...Technology can be a wonderful thing that improves lives and helps workers do more. However, the benefits of technology are not evenly distributed. If a handful of people reap all the rewards while millions more lose their jobs, that's a societal problem we need to deal with. This initiative simply asks those who are reaping those rewards to give back to help displaced workers find better opportunities. That's good for all of us. And if no jobs are lost -- great! However, if the experts are right and we do see massive unemployment, we need to prepare for what comes next."

No viable state legislation has called for such a tax, but lawmakers are increasing their focus on automation in the workplace.

AB 316 in California calls for the state's Employment Training Panel to fund projects that increase "middle skill" jobs in robotics and automation technology; those are jobs requiring "an associates degree, or an industry-recognized credential that is less than a bachelors degree but more than a high school diploma."

New York Assembly Bill 5263 would require the department of labor to study the potential impact of job automation on occupations and employment.

And this year Hawaii's legislature passed House Concurrent Resolution 89 calling for a "basic economic security working group" to explore the possibility of a universal basic income. The resolution cites the rise of such developments as "self-driving autonomous vehicles," "self-checkout lines at retail stores," and "three-dimensional printers," and notes that "hundreds of thousands of Hawaii jobs may be replaced in the near future due to innovation, automation, and disruption." The working group would report to the legislature each session.

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