Should we tax the robots as Bill Gates believes?

In an interview to Quartz, Bill Gates discussed about the possibility and necessity to establish a ‘Robot Tax’. Since robots are stealing human jobs, it is a necessity to compensate the net loss through the establishment of a new type of tax. Gates believes that this will slow down the adoption of robots at our workplaces and will help funding programs dedicated to reduce inequality. It was not clear where the tax should appear, maybe in the company’s income or maybe in the service of the robot (like every year) as some type of income tax?

There is a myriad of reactions from writers on these topics, from the ones praising the idea such as Ian Morris from Forbes as he writes: “What we should be left with are companies that can produce things, or offer services with much lower overheads. They can work robots at 100% capacity all the time – humans never get close to that – and the price of things will come down. Add on a universal basic income, funded from the robot tax, and every human will have a monthly payment that they use to live on.” To others believing is a bad idea as Leonid Bershidsky from Bloomberg who pointed out that the idea has been promoted by the French politician Benoît Hamon, candidate for the socialist party the presidency of the republique. The problem according to Bershidsky is that “French companies would have less incentive to innovate than their peers in other countries, making the French economy less competitive”.

We can start asking questions into why not the tech companies have had a special tax due to the displacement of workers in the past decades? What is going up now that Gates and Satya Nadella, Microsoft CEO think they can get taxed more to balance the robot stealing our jobs problem? The idea of Bill Gates is not new, but thankfully he read it from some Members of the European Parliament who back in 2016 they try to pass a new law to tax the robots.

It is curious how Tim Worstall, Forbes contributor and member of the UK Independence Party (UKIP) called the Bill Gates proposal as an “odd and dreadful idea” but a couple of months ago called the EU proposal which was more descriptive “Lunacy” criticizing how European Union law is made. So when a billionaire comes with an idea we immediately soften our arguments as Worstall? Or is that the BREXIT desire is in his veins and he detest all laws coming from EU? Either way I read the document drafted by the European Commission and promoted by the European Union Parliamentary Mady Delvaux, to understand more about the Robot tax proposal and find elements to offer us light into the topic.

The draft report, which was rejected by the European Parliament could be found in this link and is stored under the code (2015/2103(INL)).

The Proposal has a diverse set of arguments, here are the most relevant to this case:

1)     The robot sophistication will create a new industrial revolution that will affect society a whole and is necessary to consider new legislation. We have seen this with the calculation made by The World Economic Forum on the Future Jobs Report 2016 predicting a net loss of 5 million jobs by 2020.

2)     Since robots are going to do the work of us, humans, there are concerns on the future of employment and the welfare systems. That is the reason why more people are joining the Universal Basic Income (UBI) experiments around the world.

3)     Define in legal terms what is the nature of robots: “as natural persons, legal persons, animals or objects – or whether a new category should be created”. This is a great debate that should be held by society.

4)     When robots take their own decisions through autonomy process, that means when they use their sensors and interaction with the environment to learn and act it is necessary to identify who is responsible for the possible damage caused. There are talking about different types of damage, from job displacement to a robot hurting a human.

The proposal identifies some areas to create a specific set of laws:

1)     Areas for experimentation with robots through a European criterion. I believe this is a dangerous zone because this could really limit the creativity and innovation of researchers. This is like when George Bush Jr passed the law to limit the research on stem cells in the US and affected the scientific progress.

2)     In the areas of human care jobs the replacement of the workers for robots “could dehumanize caring practices”. They are right but also robots are helping in the operation room to diminish human errors, this is the reason why in Japan they are building robots, to take care of the elders. While having humans working with robots will offer an advantage for hospitals.

3)     Enhance the jobs monitoring trends systems. Europe has been using the Skills Panorama as a tool to try to identify what are the trends on employment. In 2018 they will complete the integration of other European Union tools that supposedly will allow anyone to understand what kind of skills they need for the future jobs.

4)     More women should get into digital jobs. One of the biggest challenge of our generation.

Now in terms of the Robot Law the European Union points out different solutions:

1)     Update the legislation on the topic each 10-15 years to adapt to the “autonomous capabilities of the robots”. This looks like a good practice because understands that in many cases legislation goes beyond the technological evolution. The reason why Uber is still illegal in many countries.

2)     The liability of the robot (the responsibility for its actions): Depend on the proof that the robot caused the damage. This is like in court when they proof that someone is guilty, then you apply the liability.

3)     The liability should be proportionate to the caused damaged: In terms of robots instructions this is related to the liability of the robot creator and the robot. A big topic for future discussion.

4)     Obligatory insurance: Similar to the obligatory car insurance. I believe this is a reasonable solution to the problem of liability.

5)     Creation of compensation fund: To cover damage that was not covered by the insurance. This part of the proposal was not clear because they also talked about the possibility of the robot creators to also get compensation.

6)     Robot registration: Create a specific registry on the European Union information system so anyone could now the robot insurance and compensation fund. So maybe this could promote illegal robots? Will they be a Malcolm X for robots fighting for the rights of migrant robots?

7)     International standards: Work to amend international treaties and include the robot legislation.

The curious element of this legislative proposal is that the word tax is on very few parts of it:

“whereas at the same time the development of robotics and AI may result in a large part of the work now done by humans being taken over by robots without fully replenishing the lost jobs, so raising concerns about the future of employment, the viability of social welfare and security systems and the continued lag in pension contributions, if the current basis of taxation is maintained, creating the potential for increased inequality in the distribution of wealth and influence, while, for the preservation of social cohesion and prosperity, the likelihood of levying tax on the work performed by a robot or a fee for using and maintaining a robot should be examined in the context of funding the support and retraining of unemployed workers whose jobs have been reduced or eliminated”;

“Highlights the importance of foreseeing changes to society, bearing in mind the effect that the development and deployment of robotics and AI might have; asks the Commission to analyse different possible scenarios and their consequences on the viability of the social security systems of the Member States; takes the view that an inclusive debate should be started on new employment models and on the sustainability of our tax and social systems on the basis of the existence of sufficient income, including the possible introduction of a general basic income”;

Even though the motion of the European Union was rejected a later version of the 2017 robot report was accepted to further discuss the issue, it contributes to the debate on the importance for the countries to think about the implications of automatization process and their impact in many areas. From a European perspective, the concern is centered on the sustainability of the welfare systems, which has been in dismissed since Margaret Thatcher. From a general perspective, it raises the question on the efficiency on taxes and how that money could be reinvested smartly in offering lifelong learning opportunities so people get ready for robots stealing their jobs.  Let’s open the discussion into the possibility of this tax and how it should be invested. What do you think? Do you believe tax will diminish innovation and competitiveness? Or it is necessary to protect our human interests beyond economic growth?

Leave your comments below and let me know if you agree with Bill Gates and Mady DELVAUX, the Luxembourgish Member of the European parliament proposing the robot tax.


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