Taxing the Robots

48 Pages Posted: 23 Aug 2018 Last revised: 27 Sep 2018

See all articles by Orly Mazur

Orly Mazur

Southern Methodist University - Dedman School of Law

Date Written: August 15, 2018

Abstract

Robots and other artificial intelligence-based technologies are increasingly outperforming humans in jobs previously thought safe from automation. This has led to growing concerns about the future of jobs, wages, economic equality and government revenues. To address these issues, there have been multiple calls around the world to tax the robots. Although the concerns that have led to the recent robot tax proposals may be valid, this Article cautions against the use of a robot tax. It argues that a tax that singles out robots is the wrong tool to address these critical issues and warns of the unintended consequences of such a tax, including limiting innovation. Rather, advances in robotics and other forms of artificial intelligence merely exacerbate the issues already caused by a tax system that under-taxes capital income and over-taxes labor income. Thus, this Article proposes tax policy measures that seek to rebalance our tax system so that capital income and labor income are taxed in parity. This Article also recommends non-tax policy measures that seek to improve the labor market, support displaced workers, and encourage innovation, because tax policy alone cannot solve all of the issues raised by the robotics revolution. Together, these changes have the potential to manage the threat of automation while also maximizing its advantages, thereby easing our transition into this new automation era.

Keywords: tax, automation, robot, technology, capital, labor, payroll tax, artificial intelligence, inequality, tax policy, innovation, robotics, unemployment

JEL Classification: K34, K31, H21, H20, H25, H55, J30, O30, O33

Suggested Citation

Mazur, Orly, Taxing the Robots (August 15, 2018). Pepperdine Law Review, Vol. 46, Forthcoming; SMU Dedman School of Law Legal Studies Research Paper No. 401. Available at SSRN: https://ssrn.com/abstract=3231660

Orly Mazur (Contact Author)

Southern Methodist University - Dedman School of Law ( email )

P.O. Box 750116
Dallas, TX 75275
United States

HOME PAGE: http://www.law.smu.edu/professor-profiles/mazur

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