‘Robot Tax’ On Automation Proposed

Assemblyman Patrick Burke, D-West Seneca, is pictured at a press event earlier this year.

Businesses that use technology to cut their workforce could face a state tax in the future.

Assemblyman Pat Burke, D-West Seneca, has introduced legislation (A.8179) that would tax companies if their adoption of automation, artificial intelligence, or other technology results in any workers being laid off or displaced. Burke’s proposal machinery, artificial intelligence algorithms and computer applications as technologies that would qualify for the additional tax.

“We live in an era of unprecedented advancement, as new technologies,from artificial intelligence to robotics, are causing unprecedented increases in workplace automation. According to a 2018 study by the Middle Class Jobs Project, 12% of all jobs in New York State were at risk of.being replaced via automation that year, and that percentage is rising at technology advances,” Burke wrote in his legislative justification. “This act would provide greater job security for all workers, blue and white collar, and will ensure that companies continue to pay their fair share as industry becomes more automated through imposing a tax on any company which displaces a worker through automation,” Burke wrote.

The new tax would equal the amount of taxes or fees imposed by the state or local government that is based on an employee’s wage and paid by the company or the employee, including state income tax, state unemployment insurance and local occupational taxes for an employee’s final year of employment with the company before the employee was laid off due to technology.

A so-called federal robot tax was proposed earlier this year in a book by Sen. Bernie Sanders, I-Vermont, who said he got the idea from Microsoft founder Bill Gates. Such a tax would have three benefits, according to proponents: disincentivizing the replacement of workers with robots, raising money for the government to replace the revenue lost from a decrease in payroll taxes, and creation of worker retraining programs for displaced workers.

“If workers are going to be replaced by robots, as will be the case in many industries, we’re going to need to adapt tax and regulatory policies to assure that the change does not simply become an excuse for race-to-the-bottom profiteering by multinational corporations,” Sanders wrote, according to Yahoo News, in “It’s OK To Be Angry About Capitalism.”

Rob Seamans of the Brookings Institute wrote in a 2021 essay that firms adopting robots up to that point had higher employment levels and better performance because they can sometimes complement human labor and make peoples’ jobs easier. He also asks whether there should be subsidies to increase robot adoption in more sectors rather than penalties for companies that use robots.

There is one more problem Seamans sees with so-called robot taxes – defininig robots in the first place.

” Settling on an appropriate definition will not be easy. Instead, policymakers should consider other policy changes to help workers, potentially including changing how capital and labor are taxed, but also focusing more broadly on labor market reform,” Seamans wrote.


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