robots and tax

Time for a re(v/s)olution: Poverty, Tax and Robots

In case you don’t follow the idea that we live in one big computer simulation, you probably should care about the possible solutions of the issues arising from inequality, poverty, tax and robots.

As far as confessions go, we are Guardian readers and we’re somehow proud of it. Perhaps triggered by our recent visit to the ‘Robots’ exhibition in the London Science Museum, perhaps by the increasing number of publications on technology and AI taking over jobs, coupled with the boom of bestsellers such as ‘Utopia for realists’, we have been rethinking the shape and form of work, labour, productivity and tax and we’d love to share our perspectives.

Can we solve poverty for once and for all? 

‘Keeping people poor is a political choice we can no longer afford, with so much human potential wasted’.

If you haven’t come across Rutger Bregman and his work, you’re almost late to the party but you can still catch up . His latest piece ‘Utopia for realists’ touches upon some of our favourite topics – universal basic income (UBI), behavioural economics and inequality. As he attempts to bring utopian concepts to the most sceptical minds with a strongly pragmatic approach (a good intro to his ideas can be seen here), we’re definitely hyping on the ideas that somewhere somehow the 9 to 6 work life has a better alternative.

WIth a strong critique on the lack of progressive politics and too much safe netting of the status quo, Bregman sees the solution in a much more ambitious, visionary approach where UBI is central to tackling poverty. He acknowledges that this would result in an overhaul of our tax system and that it would require an enormous amount of public and political support. But there is a need for a starting point and a good one is redefining what we mean by work.

Today’s world of work – The State, the People and the Tax agent

A couple of years ago, we got into a heated argument with a policy advisor who was trying to convince us that there isn’t a more efficient way of making social change than the government collecting tax. As we continue to find this perspective amusing, let’s ignore our preconceptions and explore a little more.

In a perfect and very simplified world (according to policy makers), employers, employees and self-employed will make sufficient contributions to the national pot by paying tax so that public services can provide us all with the bare necessities.

Now add to that perfect world the effects of robotisation and increased productivity, technology advancements and decreased demand for low and mid level skilled workers, aging population with more healthcare needs and all those digital nomads who mess up even the most creative bureaucrats. Then simplicity is challenged.

In a world where robotisation increases across various skill sectors, more and more employers will contribute less to the national pension and national health budgets. Wealthy self-employed individuals will continue to pay their way through, setting up the most tax effective structures in offshore locations for their business ventures. Developed economies will continue to struggle with the challenges presented by labour abundance and insufficient public services coverage. International conglomerates will continue exploiting the obsolete loopholes in a single tax state-based systems. For businesses paying tax on a simple measurement such as profit regardless of the mix its labour force or the productivity levels achieved, the real game they will be joining would be ‘survival of the most automised’. Not the best prospects you might think.

tax and robots

The Solutions

Taxing robots is unsustainable and at this point a little mad too – an idea explored by Bill Gates, he has suggested that by taxing the profits of firms using them or by introducing an installation fee as tax, governments will be able to operate with additional cash that can feed into healthcare, workers training or education. As handy as it may sound, the issue here is far from the myopic concept of employees versus robots. Suppressing automation today (and treating it as a negative externality worth being taxed) brings a strong analogue from the 1800s fears that trains will transport people too quickly.

The post-knowledge economy and post-profit making society

Taking a step back from the debate on the roles of the State, market, firm and individual, it’s easy to miss a central point, namely what has been driving all these forces of increased productivity, automation and superstar companies creation – the good old profit making and wealth creation. The neoliberal model has been a politically comfortable and business friendly for centuries and the only resolution of the labour, public services or tax problems we have been discussing, is an appetite for a progressive change of the system.

UBI will only work in practice if there is a societal shift in the way we treat work, leisure time and the utility of success which will also mean turning our backs to the current model of capitalism. Unless of course, you’re a firm believer that our computer modelled world can spin as quickly as someone is fixing the bugs.

Suits and Books. Our Pleasure.

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