Should robots be taxed?

The increasing inclusion of robotic solutions to jobs traditionally performed by human labour presents fiscal impacts with a risk yet to be discovered.

The generalisation of robotics in different economic activities will lead to the disappearance of many jobs, especially those with lower added value. Given that the “robotisation” of industrial activities is unstoppable – not having it means losing competitiveness in an increasingly technological market – the dilemma is how the different states will deal with a society with higher unemployment and lower incomes.

What is a robot?

First of all, it is important to define what is meant by a robot, since a robot is used to perform any task that can be automated. Currently, there are robotic solutions for a multitude of fields: hotels, bars and restaurants with robot butlers and robot cooks; for the service sector and the industrial, aeronautical and aerospace sectors; educational or surgical robots; or robots associated with artificial intelligence and customer assistance such as bots and chatbots. Therefore, their classification is very varied.

In the collective imagination, different types of robots appear, especially anthropomorphic (humanoid) robots, which we have become accustomed to seeing in the media. However, the revolution we are living through goes far beyond that. For this reason, four different types of robots are defined.

Industrial Robot: These are the ones traditionally seen in factory assembly lines, where the work is more dangerous. Industrial robots are automatic, programmable and capable of moving on three or more axes – some have as many as six.

Service Robots: These are robots designed to perform dirty, repetitive or dangerous tasks. The most common example of this branch of robotics are intelligent hoovers, although service robots can also be found in agriculture, logistics and construction.

Educational robots. These are robots designed to serve as a learning tool at all educational levels, from nursery and primary education to postgraduate studies, where they are used to familiarise students with programming languages such as Arduino.

Nanobots: These are robots whose components are at or near the scale of a nanometre. They are commonly used in medicine to travel inside the human body to fight certain diseases or repair organs. They can also perform other functions, such as cleaning up the environment, detecting pests or cleaning up an oil spill.

Is this a new phenomenon?

There have been three different technological revolutions in history that have affected the working ecosystem at the time with situations very similar to the current ones. The first, the industrial revolution that took place from 1760 to 1840, revolutionised human history by introducing technology that facilitated tasks that until then could only be performed manually. Among its main advances were the spinning machine, the steam engine, the railway and the typewriter.

At that time, two thirds of the workforce were women and children, and 50% of workers died before the age of 20 due to accidents and poor working conditions. Although the situation worsened at first – with the discovery of diseases associated with the new technology and increased accidents due to ignorance or poor working conditions – measures eventually led to the development of a much more advanced industrial society.

The same was true of the electrical revolution and the more recent computer revolution. All, however, were accompanied by predictions of massive job losses and at the same time ever increasing economic activity.

With all three revolutions behind us and on the brink of a fourth, it is important to bear in mind that, without the advances, it is neither possible to improve nor to compete, even if this technology destroys some of the employment traditionally held by humans. For example, it is now difficult to imagine agriculture without tractors.

“The integration of robots in companies is linked to the arrival of the Fourth Industrial Revolution, also known as Industry 4.0. Its aim is to combine current automatic processes and the intelligent technologies that exist today to create new automated lines that allow access to all the necessary data in real time,” explains El País.

Once again, predictions of massive job losses have reappeared, but the statistics point to a different reality. According to the OECD, only 14% of employment in the world is at risk of being automated in the coming years, and another 32% of that employment could be susceptible to changes in the business model with automation, integrating robotised aspects into business habits.

In the case of Spain, a 2015 Caixabank report estimates that around 29% of jobs have a low profile of being automated; 28% have a medium probability and the remaining 43% have a high probability. But the OECD report notes that only 12% of jobs in Spain are at high risk of disappearing due to the robotisation of the economy. While by no means paranoid, the data point to less alarmist predictions.

Why tax these new technologies?

Given this perspective, the debate on the maintenance of the welfare state, which is sustained by the taxation of these employees, has emerged. Microsoft founder tycoon Bill Gates has been one of the pioneers in proposing a solution. ” At the moment, the human professional who does, for example, a job worth 50,000 dollars (41,000 euros), is taxed an amount in different taxes. If a robot replaces that post would have to apply the same burden at the level of taxes,” explained gates to Express.

This opens the door to imposing taxes on robots so that the human economic contribution is replaced – in 2017, for example, labour income contributed 19.4% of EU GDP. The issue, however, is more complex than it seems. “If robots have a negative impact on the labour market, this will affect tax collection, Undoubtedly important aspect for the public finances if we take into account that the taxation of the factor work represents the main source of income in the tax systems”, they support from Five Days.

However, they qualify that “if robots allow to increase productivity and thus income (at least of the most skilled workers), tax collection must increase. In other words, the indiscriminate imposition of taxes on robots can also have negative effects on the economy and collection”.

It is therefore important to assess both sides of the consequences of robotisation, both positive and negative, taking into account that the improvement of efficiency and productivity also entails the need to change the regulatory framework of the conception of work, paying attention and focusing on the new challenges of this industrial stage.

How will this integration be imposed?

“The integration of new technologies such as robotics, nanotechnology or artificial intelligence is not intended to leave the worker unemployed, if not to allow it to perform higher value-added tasks and that it is the machines that do the most monotonous work”, they explain again from El País.

Automation of tasks will therefore occur in those tasks that are predominantly repetitive, such as those based on data or those that occur on assembly lines. This will result not only in the loss of jobs, but also in the creation of new types of jobs which will emphasise how people and machines can cooperate more effectively.

Fellow robots, or “cobots”, will begin to integrate into the workforce of multiple industries, making our traditional conception have to evolve towards the development of a co-habitation and cooperation workforce. There is even the possibility that future workers will not need to work the same hours or working conditions as they currently do to meet their basic needs.

If anything, moreover, the industrialization process has shown, it is that skilled labour is required, offering an unprecedented body of work skills. Therefore, a good way to protect not only jobs but also the well-being of workers and the economic compensation associated with their work from the uncertainty generated is to improve or expand the personal pool of skills and recycle knowledge.

In an increasingly changing labour market, workers need to make an additional effort to be able to perform more skilled jobs without fear of technological replacement. The solution, to save the workforce and the welfare state, therefore, is in the power of adaptation of our country.