The Robot Revolution and Government Revenue
Updated: Oct 30, 2019
I was perusing Reddit, recently, and came across an interesting question that someone posed. I thought it would be worth talking about here, because I think few people consider it.
If there is ever a society in which robots one day replace humans in the realm of toil, freeing humans from ever working, what will happen to government revenue, since it heavily depends on income taxes derived from production? In other words, if robots are doing all the producing and humans have nothing but free time, wouldn't this destroy income tax capabilities?
First, if you think this is a far-fetched concept, think again. Already, automation has been replacing human jobs for a long time, particularly in the manufacturing industry. Most of the jobs lost in the world are actually because of this, contrary to the belief that most jobs are lost because they went overseas. In the U.S., the New York City mayor and candidate for president began to realize this and has actually proposed a robot tax to protect against more loss! People don't seem to be taking this seriously, but they should.
There are assumptions by some people who think robots will one day do all the "drudge work" that humans do today, freeing all of human society to pursue only that which they enjoy doing without ever having to work. This is a future that could be real, one day. So, what will governments do about the income they normally collect from humans for the work they do, if humans are no longer working? I have two answers for that. One is what is likely. The other is what should happen.
In the case of the New York mayor, mentioned above, you are already seeing what governments are likely to do. They will tax companies that employ robots. This robot tax, seemingly a joke now, will become real one day. Additionally, governments have sales taxes. Humans will still buy stuff and own stuff (property taxes) and conduct all manner of activity associated with the hoards of ways governments currently tax. If there is a loss, because of lost income tax, governments could just easily make those other taxes go up to compensate for lost income taxes.
As well, there is the possibility that income taxes will not go away. Someone owns that robot, right? If that robot does the work, an income tax could be placed on the owner for the work his or her robot does and it could be progressive. If we have learned anything by now, it's that governments have no shortage of ways to tax.
OR...this COULD be a golden opportunity to rely on NON-TAX SOLUTIONS. If there was ever a need or a time for more non-tax alternatives, it will be in the coming robot revolution. Government revenue can be generated through non-tax systems, which is discussed on this blog and in my ebook. If we take the time to create MORE non-tax alternatives now and improve the ones we currently have, this could be the answer to how government revenue could easily be obtained with greater automation and less human work in the coming future.
Non-tax solutions don't require humans to work in order to generate revenue. Of course, humans still need money to spend. Luckily, someone needs to be fixing those robots and people will likely still conduct some kind of work that they enjoy (but don't have to do). If it ever gets to the point where there is no way for humans to make money, then that should mean money is no longer necessary, in which case government wouldn't need to collect any money in order to function.
Until then, non-tax alternatives are the perfect way to fill in the gaps! These are the solutions that should be strived for, now, so they are at their peak function when the time comes for robots to have a more prominent role in human society.