Craig Berry: A robot tax to fund a universal basic income is not enough – let’s think about UBD instead


Writer Craig Berry outlines his vision for a solution to the challenges of automation making workers redundant and the funding of a universal basic income 

OXFAM this week revealed that the wealth generated by society has continued to bubble to the top one per cent.

However, the top one per cent are facing an impending disaster; the rise of automation. Bill Gates, Elon Musk, Mark Zuckerberg – all are members of the one per cent, all benefited from neoliberalism, and all advocate the creation of a universal basic income (UBI). 

But rather than argue for or against UBI, another important discussion must be had; how do the one per cent expect to pay for it? Automation is having a rising displacement effect to the economy. The social costs implied by this and the inequality it breeds have caused fear to spread. To stop this, Bill Gates has suggested creating a robot tax.

READ MORE: The basic income: Can it really work or is it all just a pipe dream?

A robot tax would provide the capital to fund a UBI. Either the machines that will inevitably replace employees in a range of workplaces will have to pay an income tax, or the corporations will need to pay a lump sum tax on the purchase of robotic machines.

Imagine you’re the leader of a corporation, and you are infuriated with the human burdens of your employees that disrupt the full profitability of your business. They can only work so many hours in a day leaving the remaining hours unworked, they are prone to safety procedures or sickness and need to spend time eating their lunch or holidaying with their families. 

But thanks to the innovations in automation systems, you can now replace your employees with a machine that is not burdened with these issues, is more productive and costs less.

Between 60 and 70 per cent of an economy is stimulated by consumer goods. Now, because robots don’t have desires for chocolate, cereals or chocolate-coated cereals, they are unable to contribute to a significant proportion of the economy, and now that you have laid off your employees, they are unable to purchase these consumer goods either. 

This creates a drop in the economy, and as the leader of a corporation, there are less people who have the capital to purchase your goods. So, that’s why many are calling for a UBI – it would provide people with the capital to continue to purchase your goods.

READ MORE: David Carr: What do we do when machines make workers redundant?

To provide an income-based robot tax, an income on robotic machines would need to be set at the rate of the employees’ latest (or perhaps highest) salary for reference. But issues begin to arise with this method.

The innovation of technology doesn’t just replace the work that employees would do, but allows machines to perform tasks never operated by humans. You may not be replacing an employee, but with this type of machine you are limiting job growth. What income reference would you require these machines to be set at? How are trade unions able to provide income negotiations with a robot that is not sentient and is unable to protest? This question leads onto another issue.

An employee’s income usually changes over time, but with an income reference set at the point of the machine’s implementation, it would be unable to change unless the changes were arbitrary or set by tax authorities. But tax authorities would be set with the impossible task of estimating the rate at which employees’ income would’ve risen had they still been employed, and then attempt to do so with robotic machines that haven’t replaced employees. 

If an income tax on robotic machines cannot be developed, another option is to pay a lump sum on the purchase of the machine. What are the parameters of machines that would be eligible for a robot tax? Can we ask corporations to pay increased tax for a machine that uses increased computational power to perform a task, but not the machines that do so to a lesser extent, such as a combine harvester? After all, harvesting technology has displaced a large amount of manual labour in its long history, too.

There are increasing issues with the differentiation between “dumb” machines performing the task and the “smart” machines operating command. Manufacturing would develop robotic machines which are so integrated that it would be in conflict with the earlier issue of machines performing tasks not currently produced by humans. 

READ MORE: The evolution of universal basic income

The tax authority would need to have an in depth understanding of the engineering to identify which parts are taxable or not (“smart” or “dumb”) and to which rate they should be taxed. It could be an impossible task for a national economy to develop such a tax system, which adds complication.

Instead of attempting to create a very complex tax on robotics to pay for a UBI, a greater idea would be to socialise both the technology and the profits derived from it. Rather than a UBI, a universal basic dividend (UBD).

The policy itself is rather simple. When a company opens an Initial Public Offering (IPO), a percentage of the capital stock (shares) would be transferred into a common depository which then funds a UBD.

However, what is equally important is the narrative presented. The rich would have you believe that wealth is individually produced and collectivised by the state. This couldn’t be more wrong. The wealth in this country has always been produced collectively then privately appropriated. 

READ MORE: Calum Miller: Why we must prepare now to survive the automation apocalypse

The commons should receive a share of the capital stock in return for the investments they make in corporations’ capital. The UBD would make citizens a shareholder in the economy which they prop up by being integral in the market’s functions.

The impending disaster of the rise of automation should be harnessed by the people to create a technological revolution which is marked by socialisation. Let’s ensure that neoliberalism doesn’t gain another advantage over the working class, by socialising technological advancement by providing a UBD.

Picture courtesy of Peter Kurdulija

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