Taxation Of Smart Autonomous Robotics And Its Impacts On Australian Tax Base

The meaning and purpose of taxation

Meaning and purpose of taxation:

In the given assignment the focus will be on the tax proposal for the smart autonomous robots that are expected to be the replacement for the human employees in various industries. In this assignment the impacts on the Australian base tax will be discussed, taken into consideration the workforce of autonomous robots. The task will also discuss about the implication of tax on the robots if they are used to replace the human employees.

There are numerous kinds of taxation in Australia like taxes on individual’s income, taxes on business income, taxes on superannuation and taxes on tax professionals. Individuals and commercial corporations are under obligation to pay tax at every level of management commencing from local, state and federal governments (Barkoczy, 2017). The government collects taxes to reimburse the community service and transport the payment. In Australia, income tax forms the most noteworthy mode of taxation that is collected by the federal government all through the Australian taxation office. The primary purpose of taxation is to collect the revenue for the income and services to support the needs of the community. Taxes shall be raised at the same rate from the same level of people engaged in the same type of profession irrespective of their age. Further, the taxes shall be transparent, predictable and simple as far as possible. Moreover, the taxes shall be equitable among the various generations that mean the people with same ability for paying the tax shall pay same amount of tax irrespective of age.

A smart autonomous robot can be defined as the robot that performs the work with higher level of autonomy. It is generally desirable in the areas of spaceflight, domestic household maintenance and redelivery of goods and services. Few modern robots work autonomously within the captivity of the direct environment. One should denote that that the workplace of industrial unit robot is challenging and may comprise of disordered and unpredictable variables (Bello, 2016). The current study is based on the argument of whether imposing tax on robots is considered appropriate according to the views laid down by Gates. The central area of performing research on robots is to gain an insight of the robotic functions in order to cope with the environment whether it will be functioning on land, water and underground.

In recent interview, Bill Gates suggested that the robots that are expected to replace the human job shall be taxed. People are normally concerned regarding the impacts of the technology of robots, therefore, taxation is a god way for alleviate these fears as compared to the alternative option of banning the prospect. Though, it is expected that the human jobs will be replaced by the robots, in actual it may not be as good as it is expected. However, it will surely assist in minimising the issues regarding the labour turnover. It is suggested by Cousins that instead of taxing the robots, the government shall generate low-cost education or free cost education for preparing the the job-seeker for better performance.

Definition of smart autonomous robot

The proposal imposing tax on smart robots was bought forward in the last May that was presented in the outline report to the assembly of Europe prepared by the commission of lawful affairs (Abbott &Bogenschneider, 2017). The report lays down the projection that there can be an obligation to commence commercial reporting requirement on the level of contributions made by the robots in the economic result of an organisation with the purpose of taxation and community security contributions.

The social response in Australia for the offer made has been extremely considered as indifferent with notable exception provided by Bill Gates who initially bought forward the proposal of imposing tax on robots. Nevertheless, the notion of taxing robots cannot be dismissed. Recently it is found that market has been flooded with devices such as Google Home and Amazon Echo that have dismissed some of the domestic elements in Australia (Straubhaar, 2017). Given that displacing of labour continuous to do well it surely calls for imposing tax. Due to the growing frequency of human problems that has started to increase with rising loss of jobs and usually for those jobs for which humans have closely recognised by spending more time in preparing for it. A large number of idealists in Australia have stated that technologies have replaced humans for job. Ever since the revolution of robots has increased there has been constant growing amount of doubts concerning their growth. According to Floridi, (2017), imposing tax on robots may assist in advocating the loss of jobs for humans and might slow down the process temporarily. This could help in providing government with much needed revenues to finance the programs for the displaced workers.

Critics have concentrated towards the long-term ambiguity of the definition of robot that makes them difficult in defining the tax base. Critically the critics have laid down opinions by expressing that new autonomous robots facilitates undeniable amount of benefits towards achieving growth and productivity. However, it should not be ruled out that modest robots tax in Australia could lead to changeover in the varied globe of job (Sachs et al., 2015). These kinds of imposition of levy should form the element of wider plan to manage the cost of insurgency in robots. It is worth mentioning that every kinds of taxation bring about lump sum in duty concerning the distortion in the economy. Nevertheless, no government must impose huge amount of taxation and the system should so design that it remains equitable for each individuals irrespective of their earnings. It is mainly due to the reason that the burden of taxation falls heavily on those that have less profit and may pulverise the deprived one who may not be able to pay tax at all.

Argument concerning imposing tax on robots should be considered in the form of alternative of dealing with the options of increasing disparity (Freeman, 2015). It should be beloved that the system of taxation should be such that it is more progressive in nature with the basic income. The measure of imposing tax on robots might not have gained a widespread support. Given that the support of imposing tax on robot is not wider than the procedure may hold no lasting impact.

Arguments for and against the proposal of tax on robots

Taxes by in Australia should be reframed in such a manner that it work in the form of remedy for income disparity caused by the introduction of robot. It must be politically acceptable to apply duty on achievement of human identical to income tax. Nevertheless, this may lead to somewhat instances of higher taxation or income given that revenue is derived from activities that consist of displacing the humans from jobs with robots. In Australia, implementing a reasonable tax on robots and even an imposing the provisional tax may simply slow the speed of adopting the robot (Van, 2015). This may appear as one of positive aspect of reducing inequality. Revenue derived from imposing tax on robots can be used as wage insurance to help the citizens that are replaced by the new technology and thereby making a change to diverse career. This would work in the form of natural sense of justice and more possibly to endure tax inequalities.

Bill Gates in the latest discussion with the Quartz has stated his uncertainty regarding the capability of the society to manage speedy automation. To prohibit the social crisis government should consider the aspects of taxing robots given those autonomous results in impracticable idea (Gross, 2017). In the coming years robots with the aid of their consciousness, nest egg and accountants may have to pay income tax just like rest of the people. As per the debate put forward by Bill Gates modern age robots must be taxed either due to the translation or for the sum of revenue derived by the organisation by saving the cost of replacing human with robots (Gates, 2013).

A robot is generally regarded as a kind of capital investment similar to blast furnace or computer. Characteristically economist has laid down their opinion against taxing robots since it provides the financial system to manufacture in large amount. Taxation that determines investment is believed to deprive poor of raising any kind of money. According to Schafer (2016), making an investment in robot appears to be like making an investment in coal fired generator. It helps industrial unit to increase the output in an economy however results in imposition of social cost which has been termed by economist as negative externality. Potentially, automation at rapid pace may threaten to remove the workers from their job at a faster rate than a new sector can absorb them. This might result in communally long term expenditure and possibly might help in destructive policy of the government.

Imposing tax on robots may be worth than simply imposing tax on harmful blast furnace emission that can help in putting off the pollution and leaving the community better placed. Therefore, making an investment in robot can result human workers to be more productive rather than being dispensable and taxing robot can result a poor impact on the employees (Chander, 2015). Mainly workers may suffer from being evacuated by robots but employees as a whole will be better off due to the falling prices. Replacing workers with robots may result in higher amount of productivity with faster growing economies. Ever since increase productivity during the late 1990 and in the early 2000, the economy of America has constantly been on disappointing note. Analyst has expressed their worries regarding the era of automation where machines have taken over the work of human. However, with huge amount of cheap labour available it can be understood that organisation face very minimal pressure of making an investment in labour saving technology (Duan et al., 2015). The proposal laid down by Gates to tax robots could increase the expenses of robots relative to human labour and might further slow down the process of boom in productivity.

Arguments for the proposal of taxing on robots

When the procedure of automation becomes faster, targeting robots for tax would not be considered appropriate. Automation can be regarded as the displacement of human capital with the robots. To save human beings from unemployment, the analysis shifts towards economy’s share in capital income needs so that it can diver the removed workers. Imposing tax on robots and redistributing is viewed as a method expanding the ownership of capital. It is noteworthy to denote that removing the human beings from the process of producing their income may face identical pressure of earning their income (West, 2015). Ever since the last decade it is found that the share of total amount of income paid in proportion of the wages has been falling constantly.

The availability of labour is partially blamed for this and owners of factors of production are relatively short in supply. Nevertheless, it should be noted that machine are not in short of supply than people. Production units can churn out the complex contraptions even though the cost involved in the production of second or millionth copy of a piece of software is approximately considered as zero. Availability of abundant supply of machines cannot be considered capable of holding a fair share of market growth than human possess (Duan et al., 2015). The idea of imposing tax on robots seems to be based on the idea of innovation and automation, which will only help in cutting down the numbers of jobs available for humans. According to the census data it is debated that introduction of new technologies have created large number of jobs over the last 140 years rather than replacing. Several prognosticators have indicated that technologies are considered as real and noteworthy with some jobs may disappear from the introduction of robot but the overall future of jobs for humans does not appears to be gloomy.

According to Chander (2015), introduction of smart robots will result in increased productivity and will opens up the opportunity for new categories of jobs. Forcing the companies to pay large portion of tax will not ultimately solve the problems of community that robots will replace low skill workers nor would imposing a tax on robots. Instead it is recommended that government must emphasis on the revenues from corporate tax in order to create free and low cost education programs as this will help in preparing individuals to work side by side with robots.

The current study states that implementing tax on robots would ultimately slow down the productivity output in an economy. Several arguments have been put forward that imposing tax on robots the speed of the economy will fall and the funds that is generated can be put into use to absorb the displaced workers by providing monetary assistance. The workers that are displaced can be moved to new jobs in the field of health and wellbeing, teaching and other areas where human labour is required (Caytas, 2017). While Bill Gates can be viewed correct that not just conventional robots but all kinds of robots are possibly to mechanise a large number of workers in the coming 20 years.

Argument against taxing robots

The process of automation is currently increasing the rate of employment in several industries therefore imposing tax on robots will restrict the prospect of expansion for millions. It is evident that large number of industrialized jobs has been lost because of robots however, numerous economists have estimated that decline in the manufacturing jobs is because robots have replaced humans for machines (Christie, 2015).

Before the 20^thcentury, speedy mechanism in the textile and steel industries was escorted with the assistance of employment growth. Considering the information technology in the modern age, it is known that there are yet unmet demands in large number of industries due to increasing employment. In non-manufacturing units,research have stated that the use of information technology is associated with the rapid industry growth in employment. A large number of electronic documents have resulted in automation of huge amount of work (Hemel & Ouellette, 2014). From the year 2000, full time employment for lawful assistance and support has noticed a growth of 1.1% each year faster than the workforce. ATM has took over the work of cash from the bank tellers but the employment of bank tellers in Australia has experienced growth.

Even though it is evident that the process of automation has resulted in increased loss of job in the manufacturing, warehousing operations and truck driving but on the whole the impact of mechanization is several industries have resulted in rise of employment as well. Despite the fact the speed of progress in robotics and artificial intelligence may increase in the upcoming years but the effect of change in rise and fall of employment is not dependent on technology but also on the demand as well (Jones & Rhoades, 2013). With the advancement in such technology it will help in boosting the employment because they will be addressing a large proportion of unmet demand and will need to obtain new skills to get hold of the better paid work. Therefore, it can be concluded that Gate is correct in its proposal of providing fund to retain the human workforce and supporting them during the job transition period. However, imposing tax on robots will eventually slow down the economic growth and job opportunities in new areas.

Depreciation is the reduction in the value of an asset over the time period owing to decay, wear and tear and the decrease in price. In the given situation, for calculation of depreciation for the robot, the market price at the time of purchase will be taken into consideration. The estimated life of the asset is 8 years. Therefore, the amount of depreciation for one year based on the straight line method will be amounted to $ 37,500. The details of calculation are shown below:

Reference and bibliography:

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

Barkoczy, S. (2016).Foundations of Taxation Law 2016. OUP Catalogue.

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

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

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

Chander, A. (2015). Robots, the Internet of Things, and the Future of Trade.

Christie, M. (2015).Principles of Taxation Law 2015.

Duan, Z., Ma, H., & Yang, L. (2015, May). Fault detection for internal sensors of mobile robots based on support vector data description. In Control and Decision Conference (CCDC), 2015 27th Chinese (pp. 2702-2706). IEEE.

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Jones, S., & Rhoades-Catanach, S. (2013). Principles of Taxation for Business and Investment Planning, 2014 edition.McGraw-Hill Higher Education.

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Schafer, B. (2016). Closing Pandora’s box?: The EU proposal on the regulation of robots. Pandora’s Box, (2016), 55.

Straubhaar, T. (2017).On the Economics of a Universal Basic Income. Intereconomics, 52(2), 74-80.

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West, D. M. (2015). What happens if robots take the jobs? The impact of emerging technologies on employment and public policy. Centre for Technology Innovation at Brookings, Washington DC.

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