ATHENS – Ken makes a decent living operating a large harvester on behalf of farmer Luke. Ken’s salary generates income tax and social security payments that help finance government programs for less fortunate members of his community. Alas, Luke is about to replace Ken with Nexus, a robot that can operate the harvester longer, more safely, in any weather, and without lunch breaks, holidays, or sick pay.
Bill Gates thinks that, to ease the inequality and offset the social costs implied by automation’s displacement effects, either Nexus should pay income tax, or Luke should pay a hefty tax for replacing Ken with a robot. And this “robot tax” should be used to finance something like a universal basic income (UBI). Gates’s proposal, one of many variants on the UBI theme, allows us to glimpse fascinating aspects of capitalism and human nature that rich societies have neglected for too long. The whole point of automation is that, unlike Ken, Nexus will never negotiate a labor contract with Luke. Indeed, it will receive no income. The only way to simulate an income tax on behalf of Nexus is to use Ken’s last annual income as a reference salary and extract from Luke’s revenues income tax and social security charges equivalent to what Ken paid. There are three problems with this approach. For starters, whereas Ken’s income would have changed over time had he not been fired, the reference salary cannot change, except arbitrarily and in a manner setting the tax authorities against business. The tax office and Luke would end up clashing over impossible estimates of the extent to which Ken’s salary would have risen, or fallen, had he still been employed. Second, the advent of robot-operated machines that have never been operated by humans means there will be no prior human income to act as a reference salary for calculating the taxes these robots must pay. Finally, it is hard philosophically to justify forcing Luke to pay “income” tax for Nexus but not for the harvester that Nexus operates. After all, both are machines, and the harvester has displaced far more human labor than Nexus has. The only defensible justification for treating them differently
— source project-syndicate.org | Yanis Varoufakis | Feb 27, 2017