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Bill Gates insists Robots pay taxes

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Microsoft founder, Bill Gates, in an interview with Quartz has said robots should be taxed just as humans, insisting the taxation of robots will ensure an itch free transition of human workers replaced by robots to labour markets where human workers remain indispensable.

ImageFile: Bill Gates insists Robots pay taxes
Microsoft Founder, Bill Gates.

“Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed… If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level,” Gates said.

For decades, the dominant line on automation has been that displaced workers shift into more productive roles, which in turn grow the total economy.

Gates argues that taxes paid by robots’ owners or makers would be used to help fund labour force retraining to ensure, for example, former factory workers, drivers, and cashiers to be transitioned to health services, education, or other fields, where human workers will remain vital.

The Microsoft founder also suggested that the policy would intentionally slow down the rate at which automation is being adopted; stressing that robots taxation policy will give more time for the transition of automation to process.

The idea of what amounts to a tax on efficiency would seem anathema to much conventional economic wisdom. But that thesis has begun to show cracks and as Gates puts it, “people are saying that the arrival of that robot is a net loss,” demanding greater active engagement with job retraining and other programs that target impacted communities.

While Gates resolutely comes down in favour of government’s role in managing automation’s impacts, he offers two points that should be at least slightly compelling to free marketeers.

First, Gates says, the impact of robotics and artificial intelligence in the next 20 years will be a much more concentrated version of the steady, incremental displacement that was common throughout the 20th century. He said the market alone won’t be able to deal with the speed of that transition, and Gates further suggests, much of the potential for putting free labour to better use will be in the public sector.

Second, and probably even more importantly, Gates says automation won’t be allowed to thrive if the public resists it, adding that “It is really bad if people overall have more fear about what innovation is going to do than they have enthusiasm… And, you know, taxation is certainly a better way to handle it than just banning some elements of it”.

Gates believes that if automation doesn’t clearly benefit all members of society, it could generate some sort of resistance that would restrain the technology much more severely than any tax.

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