How to tax the robots?

Question

The Socialist candidate for the upcoming presidential elections Benoit Hamon says he wants to roll out the Universal Basic Income in France, to be paid by "taxing the wealth created by robots" (for example, news here).

How do you tax the wealth created by robots? What is so special about this policy? Is it not just a higher tax on capital?

(The answer I am looking for is like someone providing a briefing to Hamon on how to implement this policy. I am expecting concrete ideas. Some analysis of why the implementation would work or not are valuable.)

Answer 1

Robot taxation is a bit like corporate income taxation. Like corporations, robots don't pay taxes, people pay taxes. In the words of Herb Stein:

I remember that in addressing the issue in the 1980s, the late Herb Stein said that it's as if people think that if the government imposed a tax on cows, the tax would be paid by the cows. Are Taxes on Corporations Taxes on People? by David Henderson

There really are only three entities to tax. You can tax the people who own the robots, you can tax the people who buy what the robots make, or you can tax the income of people who work with robots. If you try to tax the robots directly, you'll end up with an effective combination of these other taxes.

In general, it is thought that the providers of capital are unlikely to bear very much of the incidence of taxation. Instead, it is thought that generally expected capital returns will adjust to keep the expected returns similar before and after the tax. This happens because capital is mobile. If the US tries to tax capital heavily investors can invest elsewhere, and will do so until after tax rates of return are equated. Robots are just another sort of capital, suggesting that it will be as difficult to tax them as any other sort of capital.

Taxing the buyers of robot produced goods is also problematic. As long as consumers can purchase imports without a special robot tariff then robotic produced imports will force domestic produced goods with a robotic tax to have a lower prices to leave consumers indifferent. Or they may not produce at all. Either way, consumers likely won't bear the burden.

Which leaves labor, the relatively immobile factor of production, to bear the burden.

Answer 2

I don't believe you could successfully place a tax on robots without undermining the robotic innovation that has been driving growth across the world as well as completely undermining their sole end goal of being cheap and abundant.

I understand the need for a shift in the distribution of wealth in nations. A Brookings Institute report on technological innovation from 2015 I believe stated that within a generation at current trends, it is possible that at any given time a quarter of middle aged men will be out of work.

With these factors in mind, I think the most appropriate taxation to avoid stifling technological innovation is to use the tried and true taxation on a company's profits.

Answer 3

It could be a higher tax on profits for companies that use robots. A higher tax on capital purchases of robots. A sales tax on goods produced by robots. A turnover tax proportional to the amount of a company's asset value that consists of robots. A tax on redundancies, for companies that replace people with robots.

Any of these could be combined with border adjustments.