Automation and Taxation

Kerstin Hötte; Angelos Theodorakopoulos; Pantelis Koutroumpis

doi:10.48550/arXiv.2103.04111

Automation and Taxation

Kerstin Hötte, Angelos Theodorakopoulos, Pantelis Koutroumpis

Economics, Finance and Entrepreneurship

Research output: Preprint or Working paper › Preprint

Abstract

Decomposing taxes by source (labor, capital, sales), we analyze the impact of automation on tax revenues and the structure of taxation in 19 EU countries during 1995-2016. Pre-2008, robot diffusion lead to decreasing factor and tax income, and a shift from taxes on capital to goods. ICTs changed the structure of taxation from capital to labor, with decreasing employment, but increasing wages and labor income. Post-2008, we find an ICT-induced increase in capital income and services, but no effect on taxation from ICT/robots. Overall, automation goes through various phases with heterogeneous economic effects which impact the amount and structure of taxes. Whether automation erodes taxation depends on the technology and stage of diffusion, and thus concerns about public budgets might be myopic when focusing on the short-run and ignoring relevant technological trends.

Original language	English
Number of pages	57
DOIs	https://doi.org/10.48550/arXiv.2103.04111
Publication status	Published - Apr 2022

Keywords

econ.GN
q-fin.EC

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2103.04111v2Submitted manuscript, 762 KB

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abstract = "Decomposing taxes by source (labor, capital, sales), we analyze the impact of automation on tax revenues and the structure of taxation in 19 EU countries during 1995-2016. Pre-2008, robot diffusion lead to decreasing factor and tax income, and a shift from taxes on capital to goods. ICTs changed the structure of taxation from capital to labor, with decreasing employment, but increasing wages and labor income. Post-2008, we find an ICT-induced increase in capital income and services, but no effect on taxation from ICT/robots. Overall, automation goes through various phases with heterogeneous economic effects which impact the amount and structure of taxes. Whether automation erodes taxation depends on the technology and stage of diffusion, and thus concerns about public budgets might be myopic when focusing on the short-run and ignoring relevant technological trends.",

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AB - Decomposing taxes by source (labor, capital, sales), we analyze the impact of automation on tax revenues and the structure of taxation in 19 EU countries during 1995-2016. Pre-2008, robot diffusion lead to decreasing factor and tax income, and a shift from taxes on capital to goods. ICTs changed the structure of taxation from capital to labor, with decreasing employment, but increasing wages and labor income. Post-2008, we find an ICT-induced increase in capital income and services, but no effect on taxation from ICT/robots. Overall, automation goes through various phases with heterogeneous economic effects which impact the amount and structure of taxes. Whether automation erodes taxation depends on the technology and stage of diffusion, and thus concerns about public budgets might be myopic when focusing on the short-run and ignoring relevant technological trends.

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KW - q-fin.EC

UR - https://www.oxfordmartin.ox.ac.uk/downloads/Automation-and-Taxation-WP-Upload-2022-3.pdf

UR - https://arxiv.org/abs/2103.04111

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DO - 10.48550/arXiv.2103.04111

M3 - Preprint

BT - Automation and Taxation

ER -

Automation and Taxation

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