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Why Bill Gates’ Robot Tax Is A Seductive, Yet Terrible, Idea


What effect will automation have on the future of work and employment? It’s a topic many have debated recently. Some people are optimistic, whereas others envision a “Terminator”­-style nightmare. They fear machines will take away jobs currently done by humans, causing widespread unemployment.

But to an extent, this is already happening. It’s wrong to think global trade is the key culprit for taking jobs away from Americans. The real issue is that robots are taking many human jobs, and those jobs aren’t going to come back.

In response to this dilemma, Bill Gates has suggested that we tax robots to ensure future prosperity. This is significant, given that Gates is the founder of Microsoft, a leader in the field of artificial intelligence. The idea is appealing: since machines are taking the jobs and producing the value, why not take the value from them and give it to humans? The utopian notion rises almost like a bubble in front of our eyes. But it bursts as soon as you take a second to think about what Gates is really suggesting.

Let’s Call It the ‘Westworld’ Fork

When we hear the phrase “tax the robots,” it doesn’t sound the same as “tax the laundry machines,” or “tax the computers.” It sounds a lot more like the phrase “tax the rich.” This suggests that we tend to think of the robots as an actual class of persons. When we talk about taxing robots, it’s as though we humans can “get back” at the robots for taking our jobs. By taxing robots, we could take back the value they’ve taken from us.

But wait a second. If we think of robots this way, it’s probably a sign we’ve been watching too much “Westworld.” Robots as we know them are inanimate objects. They are machines, like cars and computers.

Consider the following, then. A robot is either a sentient being, or an inanimate object. If the robot is a sentient being (which it isn’t, but in the future, who knows), then it presumably has human-like rights. A direct transfer of wealth from robots to humans would then become immoral.

But if robots are inanimate objects, then they can only be taxed in the same way all other property is taxed—by taxing the owners of the robotsIf robots are sentient, you can’t enslave them. And if they are property, you can’t draw value from them. Let’s call that the “Westworld” fork. It’s impossible to have it both ways.

Seen in these terms, the robot tax loses much of its appeal and returns to the traditional fold of debate. The “robot tax” is nothing more than a capital tax. Thus, companies that use robots must pay a higher level of taxes to make up for the fact that they are not employing as many humans. This would, in short, be a wealth redistribution scheme like any other. It is not the sort of “free money” that one first imagines when hearing a call to tax the robots.

Socialism in Seductive Garb

But the concept of the robot tax seems to get at a more important policy paradigm: that the wealth of a nation should be collected and redistributed to achieve economic equity. This is socialism, by any other name.

We’ve already embraced some aspects of socialism in our society: we believe that a critical need must be met for the sake of all citizens. Social security redistributes money from the young to the old, to enable decent lives for the elderly. Taxing robots would seem acceptable, then, if we believed we must ensure decent lives for those unemployed by robots. This is not an argument for taxing robots; it is only an attempt to reach the heart of the question. Perhaps all aspects of socialism in our current system are misguided, or perhaps current aspects will be used to justify future aspects. Or perhaps it’s a mix of both.

Did you know that Alaska gives free money to all its residents? The state runs a program called the Permanent Fund, which began as an oil corporation but has since diversified. It is a good example of what it could mean for a community to generate and distribute resources to all its members. Every resident gets a check in the mail every year, with recent checks approaching $2,000. (It is worth noting that the population of Alaska is less than the population of San Francisco.)

Of course, $2,000 a year is not even close to a living income. But if robots became the primary value producers within society, and a heavy tax was levied on robots, this could go a long way toward establishing universal basic income. The only problem is that this would only work if all the robots were nationalized—meaning, if the government owned all the robots. Otherwise, excessive taxes on robots may make them cost-prohibitive to private companies, which in turn would stifle innovation.

The only way to make it work would be full-scale socialism, similar to governmental ownership of oil in Middle Eastern nations—except worse, since robots could be expected to span all industries.

Utopia or Dystopia?

Liberals have always liked the universal basic income, due to their aspirations for social and economic equality. Conservatives, though, have also sometimes appreciated the concept. They like that it would diminish federal government spending, and replace many handout programs with direct cash transfers to the people. This why the idea of taxing robots seems so utopian at first: who doesn’t like free money?

The only problem is that money is never free, and implementing a robot tax or universal basic income would require adopting socialism, with all the perils that have historically come with that.

It is worth noting that there is nothing sacrosanct about working just to survive. Ideally, if all people could have their subsistence needs met without work, and dedicate their time and energy to other pursuits, how could this not be a good thing? Every person should work, of course, in the sense of developing his or her own character and striving to create value. But this is different from saying we should sing the praises of the daily grind as such.

If eight hours of work could get done in one, would you really insist that this is wrong? At least in theory, widespread unemployment could be a good thing, insofar as that means there isn’t too much human work around that needs doing. We can imagine that it will always be a matter of proportion, though. There will always be a need for human work, as well as for people who enjoy work for its own sake. Even if most future bars adopted robot bartenders, this would only ensure the existence of niche bars that advertise staffing humans only. Caregiving and the arts may also take on new premiums, given that these forms of work can only ever be done by humans.

It is too early to foresee what other economic arrangements may emerge if or when robots become a fundamental part of the national economy. I can’t see them yet. The only thing that’s clear is that taxing robots would amount to a schema for socialism, and everyone should be honest about at least that much.