Automation taxes halt burgeoning innovation in its tracks.
Robert J. Kovacev 20, Former senior litigation counsel in the Tax Division of the DOJ, “A Taxing Dilemma: Robot Taxes and the Challenges of Effective Taxation of AI, Automation and Robotics in the Fourth Industrial Revolution,” The Contemporary Tax Journal, Vol 9, No. 2, https://scholarworks.sjsu.edu/cgi/viewcontent.cgi?article=1157&context=sjsumstjournal
Robot tax proponents generally assume that the rise of AI, robotics, and automation will be a net negative for society, at least in the short run. The negative effects of robotization, particularly job displacement and increased economic inequality, have been characterized as negative externalities, like pollution or alcoholism.80 The assumption, therefore, is that a robot tax would be a Pigouvian tax,81 designed to disincentivize activities giving rise to the negative externalities.82
What if that assumption is wrong? AI, robotics, and automation provide benefits to society, as even some robot tax proponents admit.83 Indeed, as a general rule, technological advancement has led to increases in both employment and living standards, at least over the long term.84 Increasing the tax burden on the still-budding fields of AI and robotics could slow down the course of automation considerably, by increasing the cost of developing and deploying such technologies.85 As UK Business Minister Andrew Stephenson recently testified before a Parliamentary committee, robot taxes are “perverse,” precisely because they would disincentivize innovation.86