Shu-Yi Oei
I came across a couple of news stories recently about how South Korea is introducing the world’s first robot tax. But based on the press reports, it sounds like the so-called robot tax is actually just a reduction of the tax deductions available to businesses that invest in productivity-boosting automation. The news sources themselves concede that this “robot tax” not exactly a tax on robots but rather a tax benefit reduction for automation investment.
Talk of a “robot tax” has landed at the forefront of tax news since Bill Gates mentioned it in a Quartz interview back in February of 2017. But of course, scholarship about robots (not to mention robots themselves) has been around for quite a bit longer. There’s even a “We-Robot” robotics law and policy conference that’s been going on since 2012, which I keep meaning to crash, but then there’s always something else going on.
A lot of what seems to be driving the tax conversation is the fear that robots are taking over jobs, though there’s some uncertainty about the extent to which robots are to blame.
Personally, I’ve been having a hard time squaring the newly ascendant tax conversation about the robot tax with the broader legal scholarship on robots. In some of the news and other commentary discussing Robotaxation, my reaction has been something to the effect of “I’m not sure that word means what you think it means.” Turns out, there is something of an existing conversation about what constitutes a robot in the first place—see, for example, Richards and Smart (2013) for a nice discussion of some of the definitional issues. See also this “What is a Robot?” piece in The Atlantic. In defining “robot,” it might matter how a robot moves in the physical world, what kind of quasi-independent agency it seems to exercise (autonomous vs. semi-autonomous), how humans interact with it, and even what sorts of emotions it triggers in us mere humans. We might understand some automated machines to be robots but others to just be automated equipment. And these distinctions make sense, from the viewpoint of areas like tort law, privacy law, the law of principals and agents, and the more general regulation of robots (and of artificial intelligence as a subcategory of robots).
But in some of the tax discussions about robots that I’ve seen on the interwebs, it’s quite clear that the authors don’t necessarily mean Robot when they say Robot. In some cases, the commentators haven’t even tried to define what they mean by Robot. Instead, they’re more broadly referring to automation and capital investment, particularly automation and capital investment that displaces labor. But not all automation and capital investment is achieved through robots, so then I’m skeptical of the utility—and the accuracy—of the slightly-too-cute “Robot tax” frame. If we’re going to devolve into an argument about how favorably we should tax capital investment and automation as opposed to labor, and what the effects of that choice are, my sense is that we should just admit that that’s what we’re doing. Attempts to tax capital investment/automation less favorably than labor in order to smooth the transition to automation or preserve jobs could range from taxing the “productivity” of a given machine or piece of equipment, or requiring longer recovery periods (Just say no to expensing!), or even an excise-type tax on acquired capital equipment. We can have conversations about pretty much all of those design alternatives without having to mention the “R word” at all.
To be a bit more pointed, I worry that casting the conversation as being about new “Robot taxes” obscures the fact that capital/automation vs. labor discussion is simply an extension of an older discussion about incentives for capital investment vs. human capital investment, which has been going on implicitly or explicitly for some time. (See, e.g., here and here and here for just a few recent examples.) The “Robot tax” frame makes the issue seem new, but it isn’t, really.
But let’s say just hypothetically that we do mean “Robot” when we say “Robot Tax.” (For example, “Bender should pay taxes!” or “We should really make WALL-E file a tax return!”) It would then be unclear to me why and where we ought to draw a line between WALL-E/Bender (or more broadly, types of programmable, vaguely autonomous machines that we classify as robots, however defined) and other types of capital equipment with an automation element. Perhaps there’s some value-driven, “they’re almost human,” or “they’re just like us” thing going on. Or perhaps the line is justified based on the idea that humans behave and interact differently with some types of automated machines (for example, those that appear human or display some sort of agency in physical space) but not others. Or perhaps the dividing line is simply the notion that programmable autonomous/semiautonomous machines have more directly replaced human labor than, say, my old friend the dishwasher. My point is that even if we really did mean “Robot” when we say “Robot,” then a line between taxation of “Robot” and taxation of other capital investment and automation would need to be drawn.
I’d be curious to know what others think about this rising robot trope that I’ve found analytically frustrating from the get-go. There’s a fairly robust existing legal literature on robots and the law, which you can find on ssrn, and it seems to me that the recent tax conversation about Robots is borrowing someone else’s R word but actually talking about something a bit different.
Further reading:
Quartz: The robot that takes your job should pay taxes, says Bill Gates
The Telegraph: South Korea introduces world’s first ‘robot tax’
The Korea Times: Korea takes first step to introduce ‘robot tax’
Abbott & Bogenschneider: Should Robots Pay Taxes? Tax Policy in the Age of Automation
Ryan Calo: Robots in American Law
Richards & Smart: How Should the Law Think about Robots?
The Atlantic: What is a Robot?
Deutsche Welle: The Robots are Coming and They Might Have to Pay Tax
Robotiq: What’s the Difference between Automation and Robotics?
UPDATE 8/17/17 @ 8:30 am:
Pat Oglesby (@OglesbyPat) and I exchanged quick messages this morning about ROBOTax developments and he pointed me to some other links and directions. (Thanks, Pat!) This made me think that I should probably mention developments on the other side of the pond, lest we think it’s just a U.S. conversation. (European Parliament considered and rejected the ROBOTax idea earlier this year.) So here’s some more reading. OK, back to writing my actual paper now. This has been such a pleasant distraction!
Reuters: European parliament calls for robot law, rejects robot tax
X. Oberson: How taxing robots could help bridge future revenue gaps
X. Oberson: Taxing Robots? From the Emergence of an Electronic Ability to Pay to a Tax on Robots or the Use of Robots
CNBC: Bill Gates wants to tax robots, but the EU says, ‘no way, no way’
The Surly Subgroup 