It causes massive offshoring.

Robot taxes, imposed at any level short of universal global acceptance, gives rise to the potential for tax competition.87 A tax imposed on businesses in San Francisco may simply cause businesses to relocate their robots across the bay; a tax in California may cause moves to Nevada; a tax in the United States may cause moves to Mexico or China.88 This suggests that a global, multilateral solution would ultimately have to be found in order to impose an administrable robot tax. Easier said than done.

The recent ‘digital tax’ debate provides a useful illustration of this problem. One of the hallmarks of the modern economy is the prevalence of multinational corporations whose economic reach extends far beyond their country of origin, or even those countries where they have a physical presence.89 Many goods are tradeable across borders, and many services even more so due to the internet.90 Historically, the lynchpin of international taxation has been that businesses may be taxed in a country only if they have a permanent establishment in that country.91 In the internet era, where goods and services can be ordered online from a company without any presence in the country, many businesses pay little or no tax in countries from which they derive considerable profits.92 Accordingly, the EU and several nations have proposed ‘digital tax’ regimes that would tax the gross receipts or profits earned in jurisdictions where the business has no traditional permanent establishment.93 Discussions at the OECDlevel toward a consensus approach have continued for several years, but agreement seems elusive.94 A cross-border robot tax, imposing a tax related to the use of AI, robotics, and automation outside the taxing jurisdiction, poses the same challenges of lack of international consensus and difficulty of administration and enforcement.