Bill Gates reckons we should tax robots. Actually, we already do: it is called corporation tax, it boils down to how you package the idea.The idea is simple enough. If a robot takes a job from a human, then the government loses taxation revenue, so instead tax the robot.
Mr Gates said: “Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, social security tax, all those things. . . If a robot comes in to do the same thing, you'd think that we'd tax the robot at a similar level."
It’s neat idea, but is this any different from corporation tax?
The idea behind replacing a worker with a robot is to increase productivity per unit of money spent, and this makes more profit.
So, isn’t a robot tax and a tax on profits one and the same?
In fact, Mr Gates said: "Some of it [the tax] can come on the profits that are generated by the labour-saving efficiency there. Some of it can come directly in some type of robot tax. I don't think the robot companies are going to be outraged that there might be a tax. It's OK."
It is just that corporation tax is not very popular these days.
The Theresa May government wants to slash it to around 17 per cent to make the UK competitive in the post Brexit world.
The Trump administration wants to cut corporation tax to a similar level.
Such thinking is not very joined-up.
We live in an era when profits to GDP are close to an all-time high, meaning that wages to GDP are close to an all-time low.
Profits are high thanks in part to technology and in part globalisation.
So, what do you do about that?
Do you reverse globalisation and make it harder to automate?
Or do you tax the extra profits that accrue?
That which we call a tax on profits by any other name smells quite different, and a robot tax might smell like a rose, and might be more appealing to governments that have promised to cut corporate tax, but it is tax on profits, all the same.