Bill Gates is wrong: Don’t tax robots
Bill Gates made headlines when he suggested robots that take human jobs should be taxed at a similar rate as humans. The money, he said, could slow the rate of automation, and be used to fund government jobs.
Gates could not be more wrongheaded on this proposal.
The problem with Gates’ idea is that it assumes robots taking human jobs is something to be discouraged. The opposite is true. We should welcome robots doing more tasks for humans, thus freeing up humans to engage in other fulfilling endeavors.
Imagine the government took Gates’ approach with Microsoft computers to prevent their machines from taking jobs. Humanity would be worse off because of the unrealized productivity, connectivity, and convenience that would be impossible without computers.
The crucial component in response to automation that Gates does not mention is the Universal Basic Income (UBI). UBI will ensure that those who lose their jobs to robots will have a flexible cash grant that could be used for training, education, or to pursue whatever the individual’s passion may be.
There is a legitimate worry that the companies that own the robots will accumulate most of the wealth, and the rest will be left behind. A basic income addresses this automation cliff more effectively than attempting to delay inevitable automation with taxation.
It is possible in the future, humans will be able to scale back their work hours, while still receiving a comparable overall income through UBI because robots would be doing the bulk of humanity’s work. An individual could spend more time on volunteering, entrepreneurship, their family, civic engagement, and creative endeavors.
The greater the dividend humanity receives from robots because of their higher productivity, the larger the basic income can be without disrupting the economy.
Gates and others are stuck in the mindset that humans are meant to spend eight hours a day, five days a week in a traditional work environment. Robots are threatening to upend the system, which should be welcomed as it opens new possibilities for what people can do with their time.
Just because someone receives a wage from a company does not mean they are maximizing their potential for themselves and what they can provide to society. For example, is a single mother doing more for society by working twelve hour shifts, or spending more time raising her child?
As automation intensifies and countries inevitably start to implement basic income, many will continue to work full-time in the traditional system. Others will work part-time. And still more will find different ways to contribute to society. There is a basic human drive to develop one’s self and bring positive change to the world.
Traditional work will not necessarily cultivate each person’s true comparative advantage. The irony is that robots taking more jobs will give us more freedom to choose our best path, if coupled with an unconditional basic income.
Instead of taxing robots, we should tax activities that we want to discourage. For example, activities that harm the environment, such as fossil fuel use, animal agriculture, and resource extraction. Land ownership could also be taxed at a higher level. This could raise the same amount of revenue from wealthy individuals as Gates’ suggested robot tax in order to fund UBI and other government services, without discouraging the positive good of robotic development.
The dramatic expansion of automated jobs is going to remake the economic order and will require governments around the world to respond. The biggest mistake will be fighting this change and attempting to preserve the same system we have now, instead of using the opportunity to drastically improve it.
Image: Red Maxwell, Flickr, Ted Talk: 2009.