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Comment by liamcardenas | Hacker News Reader

Yesterday. I made a YouTube video explaining why this is a bad idea.

It's one minute and explains why the productivity of robots is already accounted for in our current income tax system.

Cliffs: Bob has a job in which he adds $50,000 worth of productivity and therefore has a salary of approximately $50,000. Let's say there is a 10% tax, therefore tax revenue is $5,000.

Now let's say that robots help him out. With the robots' assistance, Bob now adds $150,000 worth of productivity and therefore earns approximately $150,000. Since taxes are 10%, tax revenue is $15,000.

Robots added $100,000 worth of productivity and therefore taxes increased by ($100,000 * 10% =) $10,000.

As you can see the productivity of the robots was taxed without having to levy a tax on robots. This is because robots are capital -- not consumers.

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Nah. When Bob starts running the robot, he gets a raise to $60,000, and the guy who owns the robot keeps the $140k.

And by the way, there tends to be significant wage deflation of automation workers with time. I can show you an advertisement for a part time machinist who is expected to work without much supervision, use sophisticated CAM software to program parts, and run them on a CNC mill. For $14.25 an hour.

And, since Bob's productivity has gone up, two of Bob's cow orkers get fired...

Output for the three man team now reduced to one man and a robot remains the same. Employer is now paying $60k instead of $150k in wages, tax revenue generated is now $6k instead of $15k. So long at the robot's maintenance and finance (after capital investment and operations cost tax rebates) is under $90/year - then the employer wins big, Bob wins a little bit, Bob's two ex-colleagues lose their jobs, and society loses 9k/year in tax revenue.

(The numbers for the employer work out even better when they re-engage Bob's two ex-colleagues through a contracting company at $38k to work the 4pm-midnight and midnight-8am shifts (without benefits or shift loading, since 'independent contractors'...), and they keep the robot running 24hrs a day... At which point their fire another 6 of Bob's friends... And now Bob's salary gets renegotiated down, since there's now 8 other guys prepared to do his job for way less than $60k...)

And it's not like this hasn't already happened. Compare car manufacturing today with 50 years ago.

The main problem (inferred from text, not the video) is -> "Bob now adds $150,000 worth of productivity and therefore earns approximately $150,000" - No, Bob still earns $50,000 as before. All the gains from productivity goes to Eric the CEO and member of 1/10th of the 1%. By the way, Eric and his peers also successfully lobbied to decrease the tax top 1/10th of the 1%, so he effectively pays a tax of $0.

Existing tax systems burden labour more heavily, than capital. This is because capital can flee easily, but labour cannot. A dollar doesn't have a spouse, kids, parents, siblings, a social circle, it doesn't need to learn a new language or culture - it can be moved with a speed of light at a very short notice indeed. Since deploying dollars is cheaper than deploying people from the tax prospective there is a strong economic incentive to replace people with capital at workplaces.

Since Bob's productivity will increase threefold and the demand is finite it is likely Rob, Bob's mate, is going to loose his job. Now the two of them are going to compete for a single job opening and Bob will be lucky (and thankful) to stay employed with no real leverage in his salary negotiations (Rob is unemployed, lost his house and now very eager to get that job too!)

The extra profit will go mostly to the robot owner with some to the robot's inventor (although once enough people are capable of building robots the inventor will have diminishing leverage too, unless he keeps coming up with better stuff).

Then the argument goes that Rob would then become a robot inventor or a capitalist instead of working the mundane job at the widget factory. Not going to happen. He is 53, he doesn't have the capacity required and he is not going to develop on at this stage. No one is going to bet her money on Rob becoming a millionare through invention or investment or even making a decent living ever again. Rob is sad. Whenever Bob talks to Rob he is scared to loose his job to more automation.

Bob gets paid what others are willing to give him. Nobody NEEDS to offer Bob $150,000 because there are other people willing to take $50,000 for the new job as well.

To everyone who said that Bob won't necessarily get a raise, I think you are taking the example too literally. At some point, someone, be it Bob or the CEO or whoever, will earn income from the added productivity which will be taxed.

Also, in a free market Bob will most likely be paid a wage close to his marginal productivity -- but that is really beside the point.

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