What is the point of a robot tax?

While browsing articles on Artificial Intelligence, I stumbled across a piece by Milton Ezrati at Forbes. Discussing the possibility of a robot tax? This idea had been proposed by Bill de Blasio before he gave up his bid to gain the Democratic presidential nomination. Ezrati thinks it is a dreadful idea, but he is aware that both Silicon Valley leaders and current government progressives are quite keen on it.

According to the article, a robot tax would have four parts: First, it would apply to any company introducing labour saving automation. Second, it would insist that this employer either find new jobs for the displaced workers at their same pay level or pay them a severance. Third, the tax would require a new federal agency, the Federal Automation and Worker Protection Agency (FAWPA) and fourth, it would require Washington eliminate all tax incentives for any innovation that leads to automation.

The assumption appears to be that workers displaced by automation will never again find work at a comparable wage. Elon Musk for one, Bill Gates and Mark Zuckerberg are amongst those who are worried about this aspect of it, as is Democratic candidate, Andrew Yang, who suggests the introduction of a universal basic income, “to substitute, he claims, for the incomes lost to robots and artificial intelligence generally.”

However, it is not proven that the introduction of AI and robots will disadvantage workers so substantially. As Ezrati say, “innovation, if it initially displaces some workers, always eventually creates many more new jobs even as it boosts overall productivity and increases output.”

And, as he also points out, “since the industrial revolution began more than 250 years ago, business and industry have actively applied wave after wave of innovation and yet economies have nonetheless continued to employ on average some 95 percent of those who want to work.”

In my opinion, and in this respect I am in agreement with Ezrati, we have focused far too much on what will be lost with the introduction of more robotics, and not sufficiently on what is to be gained. His analogy that uses the introduction of email and the Internet regarding typists’ jobs illustrates this. Whilst those working in admin, messenger departments and typing pools no longer had their current job, new forms of employment emerged for them.

Similarly, when the introduction of automatic teller machines threatened to throw thousands of bank clerks out of work, the machines created profits that meant they could employ more tellers, and these tellers, with the assistance of different technologies, could do more interesting, complex, and valuable jobs at higher pay than they received before the ATMs were put in place.

A robot tax would be counter-productive and stunt growth in innovation, hampering the possibility of finding new types of jobs and improving living standards. It’s a proposed tax that simply doesn’t make sense.

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