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Are Robots Killing Social Programs?

Posted by: Irena Volkov, Feb. 19, 2017

Robots will displace approximately 50% of the labor force between 2023 and 2033, according to an Oxford report from 2013. Bill Gates thinks this is a huge problem for income tax, and by extension, the future of important social programs.

Robots were initially designed to work in high-risk situations and to temporarily replace workers in the event of an injury, however they have multiplied and been designed to work closely alongside humans since they have become more affordable and “intelligent”. While some argue that robots have the potential to increase labor demand because high-skilled tasks may become available to low-skilled laborers who can be retrained to preform them, others wonder what the labor market would look like after this shift. Computers can now write stock reports and publications, conduct legal research, translate conversations, and detect money laundering. Companies prefer robots to work in positions requiring manual labor because they offer higher productivity for less cost than human employees.

In an article on Business Insider, Bill Gates stated that he believes that since robots are displacing humans in the labor force, robot manufacturing companies need to compensate for the loss in income tax that go towards social programs by putting a tax on the robots. Additionally, Gates claims that the people who were displaced by robot labor should be retrained and placed in professions and markets that need extra labor such as retirement homes and nurseries. He envisions that these new positions would be paid for by the tax on the robots.

Bill Gates has a point that we should be concerned about the long term effects of robots in the workplace since 50% of the government’s revenue comes from income tax. However, the people whose jobs are most likely to be taken over by robots do not significantly contribute to this figure. Several studies such as PWC’s research have shown that people in the lower tax brackets often effectively pay a negative tax rate after deductions and tax refunds. Thus, the labor effects of more robots in the work force may not pose as big as a threat to social programs as Bill Gates thinks.

Original Story: “Bill Gates says robots that take your job should pay taxes” Business Insider, Feb. 17, 2017

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