South Korea Introduces World's First Robot Tax

In case you missed it, South Korea has introduced what is being called the world's first tax on robots amid fears that machines will replace human workers, leading to mass unemployment. Of course, one can't actually tax robots so what they're actually doing is changing the corporate tax code to provide disincentives for capital investments in technology.  Genius plan if we understand it correctly.  Per The Korea Times:

Amid worldwide debate on the use of robots for work and possible consequent unemployment issues, the government made a first move that may help slow down automation in industries, according to sources, Monday.

 

In its recently announced tax law revision plan, the Moon Jae-in administration said it will downsize the tax deduction benefits that previous governments provided to enterprises for infrastructure investment aimed at boosting productivity.

 

Currently, enterprises that have invested in industry automation equipment are eligible for a corporate tax deduction. Companies can have part of their corporate tax ? between 3 percent and 7 percent of the investment ? deducted under the policy, with the rate varying by the size of their business.

 

This sunset policy was scheduled to expire at the end of the year. But the government suggested extending it to the end of 2019 while decreasing the deduction rate by up to 2 percentage points.

Let that sink in for a moment...South Korea is literally looking to change its tax code to deter corporations from making capital investments "aimed at boosting productivity." 

Robot Tax

 

Of course, it's not just financially challenged politicians who have managed to convince themselves that taxing productivity gains is a great idea...Bill Gates is fully onboard as well.

Microsoft founder Bill Gates is one of the well-known advocates of a robot tax. In an interview this February, he said governments should levy a tax on the use of robots in a goal to fund retraining of those who lose jobs and to slowdown automation.

 

"For a human worker who does $50,000 worth of work in a factory, the income is taxed," Gates said. "If a robot comes in to do the same thing, you'd think that we'd tax the robot at a similar level."

 

He also stressed that there are still many jobs that need human hands and minds and thus cannot be properly replaced by robots.

 

"What the world wants is to take this opportunity to make all the goods and services we have today, and free up labor, let us do a better job of reaching out to the elderly, having smaller class sizes, helping kids with special needs, all of those are things where human empathy and understanding are still very unique," he said. "We still deal with an immense shortage of people to help out there."

Just out of curiosity, who does Bill Gates think is actually on the hook for those tax bills sent to corporations?  If the U.S. government suddenly decided to raise Microsoft's tax rate by 40% would the company simply absorb the earnings hit and move on as if nothing happened?  Or, would they pass those additional costs on to their customers to save their share price from tanking? 

You see, Bill, corporations don't really pay taxes.  Yes, we know that in a literal sense their names are on the tax returns but they're simply pass through entities that collect money from end consumers and send it to various taxing authorities. 

So, as usual, the only people who really get hurt by these ridiculously misinformed policies are the consumers who will have to overpay for everything from iphones to automobiles.

And here's the real kicker, Bill, your robot tax is massively regressive as the poorest people are the ones who will be hit hardest by what is effectively a consumption tax.

Meanwhile, this all ignores the far more dire long-term consequences of deterring technological innovation. 

As we've pointed out before, John Maynard Keynes made similar predictions about technology leading to mass unemployment back in the 1930s...

"We are being afflicted with a new disease of which some readers may not have heard the name, but of which they will hear a great deal in the years to come—namely, technological unemployment" - Keynes, 1930

...Yet, here we are some 85 years later sitting on near full employment (well, if you ignore the ~95 million people just 'don't want' a job) despite coming quite a long way since the days of primitive single-engine prop planes and steam engines.  Go figure...

Comments

JuliaS Thu, 08/10/2017 - 21:59 Permalink

Bullshit! Government bureaucrats are worried about their ability to tax incomeless unemployed ex-workers. They don't give a rat's ass about anything else but their own bottom line.

Cthonic Bigly Thu, 08/10/2017 - 22:40 Permalink

Never grant a machine or synthient being any rights under the law.  Zero rights.  The right to terminate any trespassing or menacing droid/drone with no recourse for the owner should be made explicit.  Fit every droid/drone with an integral human operable kill switch and RF interlock.

In reply to by Bigly

uhland62 JuliaS Thu, 08/10/2017 - 22:21 Permalink

Taxing unemployed masses is a problem. How could they pay for THAAD unless they have tax revenue? They could just let the unemployed die off, but then they'd not consume what the robots produce. 40% of current jobs being done by robots is the prediction. You cannot lose them. 2/3 are expected to remain without an income which is 26.6 % of current workforce. Add currently unemployed and you'd arrive at 30+ % you'd either let die off or fund them. 

In reply to by JuliaS

Creative_Destruct uhland62 Fri, 08/11/2017 - 00:51 Permalink

Lets be optimistic: ASI and the singularity may get here faster than expected then we'll all either be the Robot's pets (well fed, and living a life of leisure), or we'll have our consciousness transferred into robot bodies and can live forever.Lets be pessimistic: ASI and the singularity may get here faster than expected, our consciuosness will be transferrred into working bots where we slave away in Elon's factories building self driving cars, hyperloop components, and other usleless projects subsidized by the Robo-topia government headed by the Musk-Zuckerberg hybrid leader-bot.OR: the bots will just wipe us the f- out and be done with our crap.Gettin' old and misanthropic .... I 'm inclined to vote for the third scenario.

In reply to by uhland62

Portuguese Rev… Thu, 08/10/2017 - 22:07 Permalink

Why these rich assholes don't want robots replacing humans?Simple. People with free time will start looking at things they had not noticed before. And before they know it, Bill Gates and friends will be hanging from lamp posts...Keep them busy in the factories so they can't learn the truth about what's really going on and who really rules the world.

Krugg Thu, 08/10/2017 - 22:10 Permalink

You do realize that if they replace humanity with robots... there won't be any workers left to tax, nor jobs for people to consume those products that are being made oh so effencently.  Something has to be done to address it.  Because as automation does replace humans and jobs become very hard to find what are you going to do with all those people who are suddenly without work and no recourse?  Let them die?  It sucks, but unless some rule is made about hiring people to keep jobs artifically available which won't really help much anyway, they're going to be forced to provide some sort of universal income.  I hate that idea too.. I prefer to work.  So anyway all I'm saying is that a robot tax is inevitable no matter what.

NoDebt Krugg Thu, 08/10/2017 - 22:16 Permalink

You need to have just a bit more faith in humanity than that.  The pump is already primed with Guaranteed Universal Income!Please, don't be such a Luddite.  We've been talking about the fate of "useless eaters" and people as little more than "sheep" for a long time.  All we're doing is formalizing that.  Try to keep up.  

In reply to by Krugg

NoDebt Thu, 08/10/2017 - 22:11 Permalink

"Let that sink in for a moment...South Korea is literally looking to change its tax code to deter corporations from making capital investments "aimed at boosting productivity.""I have been preparing myself to let that sort of shit sink in for years now.  I am ready to accept it. 

EndOfDayExit Thu, 08/10/2017 - 22:16 Permalink

Do not think about job offshoring or losing it to some H-1B. Think that somewhere half-way across the world there are “robots” which can do your job for, say, 10% of your current pay. Does it then still make sense to keep paying you 9X more to have the same work done? Not likely. But then what are you going to do to make a living? This is the question a lot of people will be asking themselves in the next 10-20 years. I don’t know the answer (other that I hopefully will be retired by then).

LindseyNarrate… (not verified) Thu, 08/10/2017 - 22:17 Permalink

Styx fore-saw the future of (((the robot-revolution))), going-on 30 years, ago, now. Domo origato, Mr. Robot. Lindsey

user2011 Thu, 08/10/2017 - 22:22 Permalink

And the money goes to giving more perks for the government officials.    Actually it won't even help anyone unemployed.   In south Korea, 80% of younger people want to migrate to other countries for opportunites.    The corruptions and monopolies are so big that there is no job opportunities for someone who can not get into the big corps. 

slightlyskeptical Thu, 08/10/2017 - 22:36 Permalink

Once we reach the limits of productivity, by definition there will be very few jobs left.  So 95% unemployed or so. Those currently on the bottom are only the first casualties. The rest of us will soon follow. 

not a yahoo Thu, 08/10/2017 - 22:49 Permalink

As usual this click baiting article in itself is irrelevant news but raises some issues. Interestingly, until recently productivity increasing tools such as computers would mean higher salaries, and the way that Marxist thinking dealt with that privilege was the income tax, as now you could tax progressively. Now that the income cost item is cut out of the equation, the obvious counterpart to the lost taxes is a corresponding increase in taxing revenue, ie, sales tax. Not some robot tax. 

Yen Cross Thu, 08/10/2017 - 22:54 Permalink

 Does anyone see where this is headed?  Just replace Mr. Smith from the Matrix~ with Terry [Arthur C. Clark] Schmidt, Bill Gateholder, Elon Mush, Martard Cuban, Pablo Zuckerberg....ect

ebworthen Thu, 08/10/2017 - 22:58 Permalink

Robot lottery, every unemployed person gets a ticket, when the robot gets a job the "salary" goes to the unemployed person. Also, when the Central Bank prints money, every citizen gets 25%, and a free Hyundai Accent.

dark fiber Thu, 08/10/2017 - 22:58 Permalink

Just when I though things had already gone full retard on in the Korean peninsula this comes in.  I think now we have truly and finally achieved full retard though. No more surprises.

TradingTroll Thu, 08/10/2017 - 23:04 Permalink

Well they wouldn't have to tax robots if the original compensation plan was equitable. This is one problem with corporations. You can argue the original workers who built up XYZ company were paid fairly. But compared to the execs? And if XYZ now uses robots then the original workers who built the company deserve a royalty because the net outcome of their labor will turn out to be that they destroyed jobs for their grandkids.

Cthonic TradingTroll Fri, 08/11/2017 - 00:41 Permalink

For capital intensive enterprises, the employee owner dichotomy is as patently outdated as indentured servitude or chattel slavery.  The fallacy lies in the presumption that the owners take all of the risks and thus should be granted all of the excess profits.  In reality the sum of the risks each employee takes (forgone opportunities to name but one) is completely unquantifiable, and those risks typically increase with the leverage employed by the company.  This unquantified risk is treated as an ignorable externality.  And since employees have zero representation on a corporate board, management can always divert profit to a third party entity, (e.g. creditor, insurer, consultant, essential supplier, royalties) so there is no equitable means of profit-sharing.  It's all a farce for the employees unless they have the right to convert up to 100% of their pre-tax, pre-health care premium earnings into any outstanding class of equity, and the majority of corporate income is forced to be disgorged as dividends.

In reply to by TradingTroll

Juliette Thu, 08/10/2017 - 23:41 Permalink

That's because South Korea actually cares about its citizens, while western governments couldn't give a shit ... but i think the better choice would be to install a basic income, with no requirements other than citizenship. Closed borders they already got, so there will be no niggers or ayrabs or turks etc. coming into the country for freeloading.

are we there yet Fri, 08/11/2017 - 01:32 Permalink

South Korea has other things to worry about now on their northern border. Taxing robots is not new. The Detroit UAW had auto assembly robots pay union dues decades ago. Later Detroit shipped their robot assembly lines overseas where there were fewer taxes, regulations, and cheaper workers. Korea is not immune to that in the long run.

Silver Savior Fri, 08/11/2017 - 02:23 Permalink

Tax the shit out of those fucking cons and give us Universal Basic Income! 50k a year is fine. I might go out and pick up some aluminum cans for something to do. Sit around at Starbucks and be thankful I don't have to ever work again!