Bill Gates: ‘Robots that take jobs should be taxed just like the people they replace’

Microsoft co-founder Bill Gates thinks governments should impose something akin to an income tax on each robot that replaces a human.

By Liam Tung, Feb 20, 2017

Bill Gates: “Taxation is certainly a better way to handle it than just banning some elements of it.”

Robots should be taxed at the same level as the people they replace, to help fund better social services and education, according to Microsoft co-founder Bill Gates.

Governments rather than businesses need to take the lead on managing the robotics revolution and ensuring there’s a plan to deal with the unemployed workers it creates over the next 20 years, Gates told Quartz.

“Right now, if a human worker does $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 we’d tax the robot at a similar level,” he said.

Automation probably won’t lead to massive unemployment, but governments will still need to prepare for major upheaval, according to a new study.

Also, with fewer people working, governments will have less income tax to spend at a time when it may need more money rather than less.

Gates argues that governments should raise taxes on robot capital to slow down adoption and provide the time needed to devise programs that create a net benefit from this excess labor. Besides a direct robot tax, he added that some taxes could come from profits made by labor-saving efficiency.

“You cross the threshold of job-replacement of certain activities all sort of at once. So, you know, warehouse work, driving, room cleanup, there’s quite a few things that are meaningful job categories that, certainly in the next 20 years, being thoughtful about that extra supply is a net benefit. It’s important to have the policies to go with that,” Gates said.

“People should be figuring it out. It’s really bad if people overall have more fear about what innovation is going to do than they have enthusiasm. That means they won’t shape it for the positive things it can do. And, you know, taxation is certainly a better way to handle it than just banning some elements of it,” he said.

Last week the European Parliament rejected a proposal to place a tax on robot owners to fund retraining of workers affected by robotic automation. Instead, it supported laws to regulate robot adoption and create liability for a robot’s actions.

Gates’ idea for a robot tax comes as some consider whether a universal basic income may be necessary in future, although questions remain about how to fund such a policy.

Elon Musk reckons there’ll be few other options than to implement government-paid wages in response to the automation of work. Finland is currently running a basic income trial that guarantees €560 ($595) a month to 2,000 unemployed people for two years.

Gates sees his robot tax as a chance to improve services to the elderly, create smaller class sizes, and help kids with special needs, which are all tasks where humans still have an edge over machines.

“You know, all of those are things where human empathy and understanding are still very, very unique. And we still deal with an immense shortage of people to help out there,” he said.

“So, if you can take the labor that used to do the thing automation replaces, and financially and training-wise and fulfillment-wise have that person go off and do these other things, then you’re net ahead. But you can’t just give up that income tax, because that’s part of how you’ve been funding that level of human workers.”