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Illustration: Aïda Amer/Axios

Taxes targeted at firms that employ robots over human workers would be counterproductive, a new article argues — and no, it wasn't written by a robot.

Why it matters: A growing number of technologists have argued that taxing companies that invest in robots would help reduce inequality and cushion job losses caused by automation, but such a tax could cost more than its worth by slowing economic growth, WSJ's Richard Rubin writes.

How it works: The argument for a robot tax, as stated by figures as disparate as Bill Gates and New York Mayor Bill DeBlasio, is straightforward: Because the wages earned by human workers are taxed while capital investments — including in robotics — can be deducted, wide-scale automation could destroy jobs and tax revenue.

  • Such a tax would disincentivize automation and could be used to support displaced workers.

But, but, but: That's precisely the problem, argues Robert Seamans, the director of NYU's Center for the Future of Management, in a new article for the Brookings Institution.

  • For one thing, Seamans notes, fears of a robo-jobpocalypse are so far unfounded. A report last year by MIT's Task Force on the Future of Work found that AI and automation currently have the same effect on total job numbers as past technological shifts like industrial mechanization.
  • Seamans notes that firms investing the most in robots are experiencing more employment growth than companies that don't, and any tax that slowed that adoption "will likely lead to less economic growth" — which likely means less tax revenue.
  • Lastly, any robot tax would need to define what qualifies as a "robot" and what is just a piece of technology — and that question is far from clear.

The bottom line: Seamans suggests narrowing the gap between how the tax code treats capital and labor more generally, rather than targeting robots specifically, and supporting displaced workers directly.

Go deeper

Ben Geman, author of Generate
Sep 16, 2021 - Energy & Environment

First look: Greens seek K Street wedge on climate

Illustration: Sarah Grillo/Axios

Environmentalists are pressing big companies with lofty climate goals to split with their lobbying associations over sweeping Democratic legislation that includes major new clean energy spending and tax incentives.

Driving the news: A suite of climate groups just released an open letter to two dozen companies — including Apple, Walmart, Coca-Cola and Amazon — in the Business Roundtable, which has voiced several concerns about Democrats' wider spending and tax package.

DOJ sues American Airlines, JetBlue to block "unprecedented" alliance

Photo: Andrew Harrer/Bloomberg via Getty Images

The Justice Department on Tuesday sued American Airlines and JetBlue to block an "unprecedented series of agreements" that will consolidate the two airlines' operations in Boston and New York City.

Why it matters: The civil antitrust complaint alleges that the planned Northeast Alliance (NEA) "will cause hundreds of millions of dollars in harm to air passengers across the country through higher fares and reduced choice," the DOJ said in a release.

FBI: Body identified as Gabby Petito, death ruled a homicide

A memorial dedicated to Gabby Petito near City Hall in North Port, Fla. Photo: Octavio Jones/Getty Images

A body found in Teton County, Wyoming, on Sunday was confirmed to be the remains of missing 22-year-old blogger Gabby Petito, the FBI announced Tuesday.

Driving the news: The death was ruled a homicide by the Teton County coroner's office, the FBI said. The cause of death has not been determined.