Arguments For And Against Proposal To Tax Robots For Increased Reliance On Smart Autonomous Robotic Workforce

Meaning and purpose of taxation

The primary objective of taxation is to raise the revenue from the persons or organizations from their earning to help the people of the country in various ways. If the government is not able to raise enough revenue, it will not be in a position to provide any service to its community. Generally, the taxes are collected beset on the earning and irrespective of their age. However, the taxation system shall be transparent, clear and concise to the extent possible.   

Various taxes like Corporation tax, superannuation tax, income tax, business income tax and professional taxes are there that are charged by the Australian government from its people. Taxes are required to be paid by the individuals and companies since they are levied at each level of government from local, state and federal government (Woellner et al., 2016). Taxes are collected so that the government can meet the cost of public service and transfer of payment. Income tax is defined as the most significant element of tax in Australia that is collected by the government right through the Australian taxation office. Income tax imposed on individuals forms the most significant degree revenue for the government of Australia.

A smart autonomous robot can be defined as the robot that performs the task with higher degree of autonomy. It is particularly required in the areas of household maintenance, spaceflight, treating wastewater and rendering goods and services (Prassler, 2016). There are some kinds of robots, which is autonomous within the confinement of organisation’s direct environment. It is worth mentioning that every degree of freedom is prevalent in their adjacent environment but the place of work for factory robots is somewhat challenging and comprises of disordered and unpredictable variables.

Various arguments exist there in favour and against the concept of taxation on utilization of robots as the replacement of human employee. Some are in the view that, it will be a better way to evaluate the valuation of robots rather than banning the concept. However, others are in the view that charging tax against robots will not be a permanent solution. Alternatively, the organizations shall take some approaches to provide innovative trainings to their employees to increase their skills apart from inclusion of automation within the organization.

The idea of imposing tax on robots was raised in last May that was presented in the draft to the parliament of Europe prepared by the committee of legal affairs (Bello, 2016). Emphasising on the impacts of robotics automation there can be a disparity in the report that has been proposed since it requires the need to initiate the requirement of corporate reporting on the degree of contribution made by the robots in the economic outcome of an organisation for the purpose of tax.

The reaction of public has been negative towards the introduction of robotics automation with significant exception made by Bill Gates who originally authorized the notion of implementing tax on robots. Nevertheless, the notion of implementing tax should not be entirely ruled out. Recently, it is found that creation of devices such as Google Home and Amazon Echo have displaced some of the household aspects in America. Given that such kind of labour replacing innovations continuous gain success it certainly calls for implementing tax on robots (Caytas, 2017).Owing to the problems of humans, problems have started to rise due to the loss in job and at times jobs, which is identified by the humans by spending several years preparing them.

Definition of Smart Autonomous Robot

Numerous optimist in Australia have stated their opinion that technologies have replaced new jobs for humans. Nonetheless, the revolution of robots has increased and there has been continuous growth in the doubts concerning the continuity of human employment growth. Imposing tax on robots may slow down the procedure of economy growth (Abbott & Bogenschneider, 2017). Several critics have emphasised on the theory of ambiguity concerning the definition of robot that makes hard in defining the tax base. Critics have often voiced their opinion by highlighting that new autonomous robots gives irrefutable quantity of benefit in the growth of productivity. However, it must be not be overruled that modest robotics tax in Australia during transition in a different world of work. These kinds of taxation must form the part of the wider plan to monitor the consequences of revolution of robot. Except the lump sum amount of tax all kinds of taxation introduces distortion in the economy. However, government should not implement tax on lump sum amount (Burgers & Glavas, 2016). The system of taxation must be such that it should be similar for each person irrespective of an individual’s income or expenditure. This is due to the fact that the burden of taxation would heavily fall on the less income group of people and might grind the poor that may not able to pay tax.  

Debate on implementing tax on robot must be viewed as alternative options of dealing with growing inequality (Barrett, 2017). It should be natural to take into the considerations the greater progressive is the income tax and the basic income. Hence, the measure of taxing robots is yet to gain extensive backing. Given that if the support is not wider then process of imposing tax will not last long. Taxes in Australia should be framed in such a manner that it work in the form of remedy due to the disparity income with the introduction of robot. It must be governmentally accepted and sustainable to impose tax on robots rather than simply imposing on the high-income group of people. Though this would not tax the personal achievement of human identical to income tax however it might lead to instances where humans are being replaced with robots (Fierro, 2016).

In Australia, implementing a system of moderate tax on robots may ultimately slow the process of adopting robotic technology and appears in the form of positive strategy of addressing instances of higher inequality. Revenue can be directed towards the wage insurance so that it can help the individuals that are replaced by the new technology and ultimately making transition to different career (Paul, 2017). This would accordingly help in enduring the natural sense of justice.

Bill Gates in the recent interview with Quartz stated his scepticism regarding the ability of the society to manage speedy automation. To cut down social crisis government must consider the aspects of taxing robots given that automation results in impracticable notions. In the coming years, robots with their own consciousness, nest eggs and accountants may be required to pay income tax just like rest of us. According to the statement of Bill Gates, robots must be taxed either due to translation or for the sum of profit derived by companies by displacing humans with robots (Fitzpatrick et al., 2014). The money that is generated can be used to retrain the workers and may be used to finance expansion of health and education for old and sick. However, several economist have rightly expressed their opinion that robots is regarded as capital investment similar to blast furnace or a computer.

Arguments for the proposal of imposing tax on robots

According to (Morgan et al., 2016) robots should not be taxed since they provide the economy with abundant of output. Taxing that determines investment is understood to make people poor without raising any kind of money. Investing in robots materially assist in increasing the output but also results in social cost that has been termed by economist as negative externality. Speedy automation may possess threat of removing workers from job at a faster rate than a new sector can absorb them. This may be socially costly and might result in destructive policy as well. Implementing tax on robots is just like taxing a harmful blast of furnace emission (Barkoczy et al., 2016). Investing in robots can result human workers to be more productive and taxing them could lead to poor impact on the employees.

Workers may suffer by being displaced by the robots but workers as a whole can be better off due to the instances of falling prices. Slowing the employment of robots in the areas of health care can be regarded as the useful process of preserving stability in the Australian society (Vann, 2016). However, as evident from the Gates proposal currently automation is not taking place at a rapid speed. Displacing workers with the introduction of machines may result in increase in productivity with faster growing economy. Studies have stated their concern regarding the era of automation where machines have took over the work of managing warehouse. Nonetheless, with large variety of cheap labour it may be understood that companies face little pressure of investing in labour saving technologies (Barkoczy, 2017). The plan of imposing tax on robots by increasing the expenses of robots relative to human labour might lead to delay in overdue boom in economic productivity. When the procedure involving automation turns out to be faster robots may not be correct to target for tax.

To save humans from penury the reason goes in the direction of economy’s share of capital income needs to diver the displaced workers. Hence, with the introduction of smart robots it will assist an economy to spur increase growth in the areas of new jobs together with the introduction of entirely new types of jobs. Enabling the corporations to wage in large amount of taxes will certainly not aid in solving the bigger community problems that robots will eventually remove the low skilled workers nor would impose tax on robots (Anderson et al., 2016). As an alternative, government must focus on corporate tax revenue to create low cost educations programs in order to prepare and educate workers to work alongside robots. For people who are not able to land themselves jobs government can should provide them with basic universal income and other kinds of safety nets for those who are least advantaged.  

From the following study it is understood that imposing tax on robots with the hope that those robots would replace huge sum of workers in the next 20 years. It is argued by several researchers that imposing tax on robots, the speed of economic growth would fall and the funds that are raised can be used to retrain the displaced workers by providing them with monetary assistance. The workers that are displaced can be shifted to the new job such as in the areas of health care and education where the human effort is needed (Braithwaite & Braithwaite, 2016). While Bill Gates could be regarded as right in his assertion that not only traditional robots but all types of artificial intelligence applications is likely to introduce the system of automation in huge amount in the coming 20 years.

Arguments against taxing robots

The automation of computer is currently increasing employment in several industries; therefore, taxing robots would lead to fall in the speed of economic growth and will further limit the opportunities for growth for millions of people. It is rightly argued that large number of manufacturing jobs has been lost with the introduction of automation (Tran-Nam & Walpole, 2016). However, according to economist the cause of decline in manufacturing jobs is that machinery has replaced the work of humans. Before the mid-20^th century intense automation in the textile and steel industry is carried with the help of growth in employment as well. In the modern era when information technology is considered it is widespread that there are yet the some areas where demands have not been met despite the growth in employment.

Perhaps several electronic documents have automated several work and from 2000 onwards, employment in the areas of legal assistance and legal support have witnessed growth of 1.1% every year (Abbott & Bogenschneider, 2017). ATM have replaced the bank tellers in handling of cash however, the employment of bank tellers have witnessed growth in Australia. Despite the fact that advancement in robots may increase over the next decade but the effect of change whether increase or decrease in employment is not reliant on technology but it is dependent on demand. The introduction of boosting technology will help in increasing employment, as they will address a large amount of unmet demands (Prassler, 2016). However, there will be some losers and winners as some people will witness their jobs becoming obsolete and may require additional new skills to obtain a well-paid work. Hence, it can conclude that taxing robots will lead to slower growth of the economy as automation is creating several jobs than destroying the same.

Calculation of depreciation:

Depreciation is the amount charged against the asset for the normal wear and tear and reduction in the value of the asset. Depreciation can be charged by straight-line method or reducing balance method or written-down value method (WDV). Under the SLM the depreciation is charged by dividing the value of the asset by the estimated useful life after reducing the salvage value of the asset, if any. On the contrary, under WDV method the depreciation is charged based on the value of reduced balance. In the above solution, the depreciation is calculated based on the straight-line method and the market value of the asset on the purchase date that is, $ 300,000 is considered as the value of the asset. The resulting depreciation for the year is computed as $ 37,500.

Reference list:

Abbott, R., & Bogenschneider, B. N. (2017). Should Robots Pay Taxes? Tax Policy in the Age of Automation.

Anderson, C., Dickfos, J., & Brown, C. (2016). The Australian Taxation Office-what role does it play in anti-phoenix activity?. INSOLVENCY LAW JOURNAL, 24(2), 127-140.

Barkoczy, S. (2017). Foundations of Taxation Law 2017. OUP Catalogue.

Barkoczy, S., Nethercott, L., Devos, K., & Richardson, G. (2016). Foundations Student Tax Pack 3 2016. Oxford University Press Australia & New Zealand.

Barrett, J. M. (2017). Tax and Welfare in a Post-Labour Defence Society.

Bello, S. K. (2016). Robotics application in flexible manufacturing systems: prospects and challenges in a developing country.

Braithwaite, V., & Braithwaite, J. (2016). Managing taxation compliance: The evolution of the ATO Compliance Model.

Burgers, H., & Glavas, C. (2016). Australia has an internationalisation, not an innovation and R&D problem. Conversations, (19).

Caytas, J. D. (2017). European Perspectives on an Emergent Law of Robotics.

Fierro Peñuela, L. F. (2016). Flexible spaces: value creation through robotics in multifamily real estate (Doctoral dissertation, Massachusetts Institute of Technology).

Fitzpatrick, P., Ceseracciu, E., Domenichelli, D. E., Paikan, A., Metta, G., & Natale, L. (2014). A middle way for robotics middleware. Journal of Software Engineering for Robotics, 5(2), 42-49.

Morgan, A., Mortimer, C., & Pinto, D. (2016). A practical introduction to Australian taxation law 2016.

Paul-Choudhury, S. (2017). A robot tax is only the beginning. Paul-Choudhury, S. (2017). A robot tax is only the beginning.

Prassler, E. (2016). Robotics Academia and Industry: We Need to Talk. IEEE Robotics & Automation Magazine, 23(3), 11-14.

Robin & Barkoczy Woellner (Stephen & Murphy, Shirley Et Al). (2016). Australian Taxation Law 2016. Oxford University Press.

Tran-Nam, B., & Walpole, M. (2016). Tax disputes, litigation costs and access to tax justice. eJournal of Tax Research, 14(2), 319.

Vann, R. J. (2016). Hybrid Entities in Australia: Resource Capital Fund III LP Case.

Woellner, R., Barkoczy, S., Murphy, S., Evans, C., & Pinto, D. (2016). Australian Taxation Law 2016. OUP Catalogue.

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