Should robots pay income tax? Bill Gates thinks so. In an interview with Quartz, he posits a human worker performing $50,000 worth of work, with the wages subject to income tax, social security tax, and so on. “If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level,” he says.
Lawrence Summers, the past Harvard president and former treasury secretary, differs. In The Washington Post, he writes, “I usually agree with Bill Gates on matters of public policy and admire his emphasis on the combined power of markets and technology. But I think he went seriously astray…when he proposed, without apparent irony, a tax on robots to cushion worker dislocation and limit inequality.”
Summers does agree that automation poses a problem but sees Gates’ proposal as misguided. “First, I cannot see any logic to singling out robots as job destroyers. What about kiosks that dispense airplane boarding passes? Word-processing programs that accelerate the production of documents? Mobile banking technologies? Autonomous vehicles? Vaccines that, by preventing disease, destroy jobs in medicine?”
Second, he suggests, robots don’t just produce the same product or service for less—they often produce better products. For example, he writes, “Autonomous vehicles will likely be safer than ones driven by humans.”
And third, he asks, “…why tax in ways that reduce the size of the pie rather than in ways that assure that the larger pie is well distributed?”
Gates seems to acknowledge that a robot tax may—if not shrink the pie—at least keep it from growing as fast as it otherwise might. However, the alternative—succumbing to a fear of automation that leads to banning some elements of it—is worse, he says.
Both Gates and Summers see a role for governments. Summers writes, “They likely will need to take a more explicit role in ensuring full employment than has been the practice in the United States. Among other things, this will mean major reforms of education and retraining systems, consideration of targeted wage subsidies for groups with particularly severe employment problems, major investments in infrastructure and, possibly, direct public employment programs.”
And when asked whether business or government should play an active role, he responds, “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.”
