One San Francisco Politician Is Exploring A Tax On Robots

By Ben Schiller April 04, 2017

With fears about the job-killing effects of automation growing every day, once unthinkable ideas are starting to get an airing. A universal basic income (UBI)–where the government gives everyone enough money to live on–has lots of supporters, especially in Silicon Valley. And now some prominent individuals are calling for a tax on robots. The thinking: If you make robots more expensive, there will be more public funds to help retrain workers (or pay for that basic income)–and the higher cost might keep some companies from buying robots and quickly tanking the employment rate.

Bill Gates recently called for a robot tax in an interview with Quartz, arguing that it could slow the shift to a more robot-centric future, allowing society to catch breath. Moreover, he said, it could raise revenues to pay humans for more human types of work, like looking after children or the elderly.

Gates’s position was shocking because you don’t often hear tech executives, even ex ones, arguing with unfettered tech progress, and because, as Quartz pointed out, Microsoft is a big developer of artificial intelligence. But the CEO turned mega-philanthropist may have made the idea more acceptable for others to consider and debate. And now Jane Kim, one of 11 city supervisors in San Francisco, has begun to explore more seriously what it would look like for a city to actually implement such a tax.

Kim says she read Gates’s interview and wondered if a robot tax might help the city deal with inequality. “We need to think about investments in our society that don’t exacerbate the wealth and income gaps that we already see today,” she tells Fast Company. “We don’t want to become a third-world country where there’s a big divide between the very rich and very poor.” San Francisco has one of the biggest income gaps in the country, according to figures from the Brookings Institution.

Kim, who represents areas like Union Square, the Tenderloin, and Civic Center, is setting up a working group to consider how an automation tax might work. She hopes it will include representatives from the tech community, academia, and unions, and that it can work through some of the practical questions. These include how much revenue the city stands to lose from lost payroll taxes due to automation, and what industries might be most affected. “It’s not only going to be manufacturing and truck drivers. It’s also going to be restaurants, hotel workers, and health care, which form a strong base of employment in the city,” she says. The tax would be paid by companies adopting robots over workers, not by robot-makers.

Kim sees revenue raised from the tax going toward education. She notes that an increasing number of jobs require a college degree, meaning that the tax could have a role in making college more affordable (the city is already taxing high-end real estate to pay for free tuition). Like Gates, she also favors exploring ways to slow the automation wave, allowing government and business to put in policies that help people transition. “It may be that government needs to play a role in regulating automation over time, so we can absorb job displacement at a rate that’s more sustainable for our country,” she says.

Many economists are skeptical about the workability of an automation tax, not least because it’s hard to define exactly what harmful automation is. If McDonald’s replaces a server with a robot, it’s clear that a worker has lost a job to a machine. But if an office puts in an answering machine, it may be that the worker is just doing something else than answering phones all day. Automation could have positive effects, for instance allowing people to avoid dangerous work, or to retrain and move up the wage scale.

These concerns were enough to derail a robot tax proposal put forward by some European lawmakers this year. But, a report from the European Parliament did suggest other radical ideas, including requiring companies to report robot adoption, and the concept of “electronic personhood” where robots would have some of the rights and responsibilities of human beings.

Kim doesn’t claim that taxing automation is a silver bullet, only that it’s worth pursuing along with other measures, including a basic income guarantee. She supports UBI, but points out that many proposals are un-funded, unlike the robot tax, which both has a social effect (more jobs, less automation) and generates money for other things.

Most of all, Kim–possibly the first public official in America to publicly support a robot tax–is keen to experiment. “We are the center of the tech world here in San Francisco. There is a broad concern about automation and job displacement in the future,” she says. “We want to be the first to put ideas out there, so they can be explored. Then we want others to follow.”

Fast Company

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