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C. Warren Axelrod

Taxing Computers and Robots … Revisited

There have been quite a few recent articles that suggest taxing robots and using the collected funds to ease the negative impact of job losses and to train workers in modern technologies (particularly cybersecurity, in my opinion). One such article is Kevin J. Delaney’s “The robot that takes your job should pay taxes, says Bill Gates,” which was posted February 17, 2017 at https://qz.com/911968/bill-gates-the-robot-that-takes-your-job-should-pay-taxes/

There is a countervailing argument, expressed in a February 25, 2017 article in The Economist with the title “Why taxing robots is not a good idea.” It is available at https://www.economist.com/news/finance-and-economics/21717374-bill-gatess-proposal-revealing-about-challenge-automation-poses-why-taxing While the arguments in this article are reasonable and popular among economists, a relatively small tax, which would be spread across products costing hundreds of billions, if not trillions, of dollars, could have major benefits for retraining, for example, without incurring the negative influences, such as slowing growth, described in the article in The Economist.

This reminded me again of an article that I had written way back in the winter of 1994. It had the title “Byte the Bullet: Tax Technology’s Returns” and was published in Short Circuit magazine, a limited-distribution publication (no blogs in those days!). As an aside, according to an article “The History of Blogging” by WebdesignerDepot staff, posted March 14, 2011, “It’s generally recognized that the first blog was Links.net, created by Justin Hall, while he was a Swarthmore College student in 1994.” Same year … just a coincidence!

Previously, in an April 18, 2016 BlogInfoSec column, “Taxing Robots to Train Humans,” I suggested that a similar model to that which I proposed in 1994 be applied to robots. Perhaps my blog column gave Bill Gates his inspiration, though I very much doubt it.

I am glad that the mainstream media has picked up on this theme, except that it is not so radical an idea as it has been made out to be. It is regrettable that such a tax on PCs and other work-displacing technologies was not imposed starting in the 1990s. Had it been, we would have had billions of dollars with which to train millions of workers in new technologies and might have avoided much of the current mismatch between demand for technical skills and supply. It might have also reduced the outflow of jobs experienced because of the offshore IT outsourcing boom in the first decade of the 21st century.

We are seeing some glimmer of hope that domestic workers are being trained in up-to-date software techniques. For example, Steve Lohr’s article on the front page of the July 31, 2017 New York Times, “That Job Sent to India May Now Go to Indiana,” describes how some software jobs are being outsourced to domestic, rather than offshore, companies, and how major companies, such as IBM, are planning to hire thousands more U.S. workers over the next few years.

But, oh, what might have been if we had been investing all along in our technical workers over the past two-to-three decades. The “great IT outsourcing” of the early 2000s would likely have still occurred, but at a much-reduced level, and we would have been savvier and more secure as a nation with less expertise abroad and more in our own hands. We might even have seen fewer data breaches from abroad as our legions of software experts built more secure systems and stronger defenses. Well, those are the missed opportunities, but it’s not too late to ramp up such training programs and fund them from taxing the technologies that pushed folks out of traditional jobs in the first place.

Again, it is not such a radical idea as has been made out in the press. It’s mostly common sense and fair play and an area where government could really make a difference. Fine tuning the tax rates so that they would not slow down progress would be required, but that is eminently doable. So, let’s do it!

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