ACCOUNTING
Artificial Intelligence / Automation : Does a Tax on Robots that Replace Workers Make Sense ?
Compiled by John Joseph Parker Contributing Editor
A
2017 report from PwC suggested that 38 percent of jobs in the United States “ could potentially be at high risk of automation by the early 2030s .” In the bull ’ s eye — transportation , manufacturing and retail jobs to name just a few . Artificial intelligence and robotics have been improving at exponential rates and the idea of a robot tax to slow down automation-driven job losses and fund worker programs continues to be a subject of conversation . What will happen when companies no longer need large numbers of human workers ? Can a robot tax stop or slow down this coming crisis ? What would a tax on robots mean for New Jersey businesses ? COMMERCE asked accounting firm experts to weigh in on this important issue .
Goldstein Lieberman & Company LLC By Phillip E . Goldstein , CPA , Co-Founder , Managing Partner
Has anyone ever heard of a tax that was levied and now no longer exists ? Taxes are like tolls . When the George Washington Bridge was built , tolls were charged to cover the expenses of the construction . After expenses were covered , the tolls not only stayed in place , they increased . The solution for New Jersey and its businesses is not an addition of new taxes — that ’ s one of the primary reasons so many companies are fleeing . The solution is for government — federal , state and local — to look at creative ways to streamline many of their arcane operations . Sure , robots could mean fewer workers and that could mean fewer tax dollars , but fewer tax dollars could also mean that government , like so many New Jersey businesses , would need to run more efficiently and effectively — like a lean , robotic machine .
Klatzkin By John Blake , CPA , MBA , Partner
With the increased cost associated with having a workforce , including an increasing minimum wage and the diminishing pool of qualified individuals to fill jobs , companies are starting to find robots a more attractive option . However , if robots replace humans , then there is potential for unemployment to increase , causing fewer income taxes to be collected by the state , severely impacting state revenue . Imposing a tax on robots would help bolster the state ’ s lost revenue and perhaps slow down automation . Companies may be less inclined to move towards automation if a tax is associated with having the robot workforce considering the high upfront cost . This would likely impact companies differently , so they would have to go through a cost-benefit analysis to see if the robots were more cash-friendly — even with an associated tax .
MSPC By Len Sprishen , J . D ., LL . M ., Tax Counsel
I still think it ’ s a bit soon to be anxious about robots , let alone a robot tax . However , I believe the data on innovation shows that even if some workers in New Jersey or anywhere else end up displaced , many more jobs would be created through disruptive technology , with the attendant improvements in efficiency and output . So , while I understand that it ’ s important to protect our state ’ s workforce , the reality is that robots are unlikely to profitably perform most human jobs they could potentially take over ( at least , not for a while ). Moreover , because governments receive so much revenue from income taxes , and because companies will be tempted to automate to save on those taxes , there will be a great deal of caution and debate surrounding implementation of a robot tax . While probably a reality down the road , although it could take on a different incarnation ( like a tax on companies that are significantly increasing their automation ), a robot tax may end up driving companies to build overseas , and will create more regulatory and agency bloat . Consequently , such a tax , which would temporarily preserve a human workforce , will likely have effects detrimental to the competitiveness of New Jersey businesses .
Robots will continue to replace workers as technology improves . 40 COMMERCE www . commercemagnj . com
Getty Images / iStockphoto
Getty Images / iStockphoto