Revisiting the Automation Tax Debate in Light of COVID-19 and Resulting Structural Unemployment

Abstract

Even before the COVID-19 pandemic, the idea of an automation tax or “robot tax” has been debated in several jurisdictions as a response to the increasing adoption of automation technologies. These broadly refer to various proposals attempting to tax the use of machines that replace human workers. This debate has been considered in greater detail in a piece which I co-authored with Glendon Goh, “Taxation of Automation and Artificial Intelligence as a Tool of Labour Policy”. The focus of this debate has generally been on finding a balance between reaping the benefits to society of increased efficiency and productivity resulting from automation and the societal costs of worker displacement and structural unemployment. In the context of the current pandemic, as the economy suffers, the need for measures to protect jobs is greater than ever.

As lockdowns ease around the globe and businesses reopen, the threat of jobs being automated by machines and workers being displaced as a result has significantly increased. Businesses must keep the number of workers on site to a minimum to comply with safe distancing measures. Under these constraints while social distancing remains the norm, automation might be the way forward for companies that still want to continue production while minimising human contact. The threat of a workforce being replaced by robots and automation, a threat that has already alarmed the labour movement, is heightened with COVID-19. There will be considerable layoffs.

Keywords: Tax Law, Taxation, Robot Tax, COVID-19