Automation and taxation

Kerstin Hötte; Angelos Theodorakopoulos; Pantelis Koutroumpis

doi:10.1093/oep/gpae006

Automation and taxation

Kerstin Hötte, Angelos Theodorakopoulos ^*, Pantelis Koutroumpis

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

Abstract

Do automation-induced changes in labour and capital income undermine public revenues? Decomposing taxes by source (labour, capital, sales), we analyse the impact of automation on tax revenues and the structure of taxation in nineteen EU countries during 1995–2016. Before 2008 robot diffusion was associated with a decline in total tax revenues and taxes from capital, along with decreasing labour and capital income and output. After 2007, the negative effects diminish. Information and Communication Technologies show a weak negative but persistent effect on total tax revenues and taxes on goods for the full period, and an increase in capital income. Overall, the impact of automation on production and taxation varies over time. Whether automation erodes taxation depends on the technology and stage of diffusion. Concerns about public budgets appear myopic when focusing on the short run and ignoring relevant technological trends.

Original language	English
Pages (from-to)	945-969
Number of pages	25
Journal	Oxford Economic Papers
Volume	76
Issue number	4
Early online date	15 Mar 2024
DOIs	https://doi.org/10.1093/oep/gpae006
Publication status	Published - 1 Oct 2024

Bibliographical note

Copyright © Oxford University Press 2024. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in anymedium, provided the original work is properly cited.

Data Access Statement

Supplementary material is available on the OUP website at the article page [https://doi.org/10.1093/oep/gpae006]. These are the online appendix and the replication package contained in the zip folder htk_replication_package.zip. The replication package includes the Stata code used to produce all tables and figures and all associated publicly available data. However, the proprietary dataset ‘World Robotics 2016’ with information on robot deliveries and stock is purchased from the commercial provider International Federation of Robotics - IFR (https://ifr.org/) and, therefore, we are not allowed to make the data public. Any interested researcher can purchase the data directly from IFR. The replication package provides detailed information about the data sources, variables, and steps to estimate all results, export tables and plot figures for both the manuscript and online appendix

Keywords

Technological change
ICT
Robots
Fiscal revenues
Labor

Access to Document

10.1093/oep/gpae006Licence: CC BY 4.0

K Hotte et al_Automation and taxation
Copyright © Oxford University Press 2024. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in anymedium, provided the original work is properly cited.
Final published version, 1.39 MBLicence: CC BY 4.0

Cite this

@article{f735c9824e6a43ef88a84a0c8d7a8171,

title = "Automation and taxation",

abstract = "Do automation-induced changes in labour and capital income undermine public revenues? Decomposing taxes by source (labour, capital, sales), we analyse the impact of automation on tax revenues and the structure of taxation in nineteen EU countries during 1995–2016. Before 2008 robot diffusion was associated with a decline in total tax revenues and taxes from capital, along with decreasing labour and capital income and output. After 2007, the negative effects diminish. Information and Communication Technologies show a weak negative but persistent effect on total tax revenues and taxes on goods for the full period, and an increase in capital income. Overall, the impact of automation on production and taxation varies over time. Whether automation erodes taxation depends on the technology and stage of diffusion. Concerns about public budgets appear myopic when focusing on the short run and ignoring relevant technological trends.",

keywords = "Technological change, ICT, Robots, Fiscal revenues, Labor",

author = "Kerstin H{\"o}tte and Angelos Theodorakopoulos and Pantelis Koutroumpis",

note = "Copyright {\textcopyright} Oxford University Press 2024. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in anymedium, provided the original work is properly cited.",

year = "2024",

month = oct,

day = "1",

doi = "10.1093/oep/gpae006",

language = "English",

volume = "76",

pages = "945--969",

journal = "Oxford Economic Papers",

issn = "0030-7653",

publisher = "Oxford University Press",

number = "4",

}

TY - JOUR

T1 - Automation and taxation

AU - Hötte, Kerstin

AU - Theodorakopoulos , Angelos

AU - Koutroumpis, Pantelis

N1 - Copyright © Oxford University Press 2024. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in anymedium, provided the original work is properly cited.

PY - 2024/10/1

Y1 - 2024/10/1

N2 - Do automation-induced changes in labour and capital income undermine public revenues? Decomposing taxes by source (labour, capital, sales), we analyse the impact of automation on tax revenues and the structure of taxation in nineteen EU countries during 1995–2016. Before 2008 robot diffusion was associated with a decline in total tax revenues and taxes from capital, along with decreasing labour and capital income and output. After 2007, the negative effects diminish. Information and Communication Technologies show a weak negative but persistent effect on total tax revenues and taxes on goods for the full period, and an increase in capital income. Overall, the impact of automation on production and taxation varies over time. Whether automation erodes taxation depends on the technology and stage of diffusion. Concerns about public budgets appear myopic when focusing on the short run and ignoring relevant technological trends.

AB - Do automation-induced changes in labour and capital income undermine public revenues? Decomposing taxes by source (labour, capital, sales), we analyse the impact of automation on tax revenues and the structure of taxation in nineteen EU countries during 1995–2016. Before 2008 robot diffusion was associated with a decline in total tax revenues and taxes from capital, along with decreasing labour and capital income and output. After 2007, the negative effects diminish. Information and Communication Technologies show a weak negative but persistent effect on total tax revenues and taxes on goods for the full period, and an increase in capital income. Overall, the impact of automation on production and taxation varies over time. Whether automation erodes taxation depends on the technology and stage of diffusion. Concerns about public budgets appear myopic when focusing on the short run and ignoring relevant technological trends.

KW - Technological change

KW - ICT

KW - Robots

KW - Fiscal revenues

KW - Labor

UR - https://academic.oup.com/oep/advance-article/doi/10.1093/oep/gpae006/7630148

UR - http://www.scopus.com/inward/record.url?scp=85204027315&partnerID=8YFLogxK

U2 - 10.1093/oep/gpae006

DO - 10.1093/oep/gpae006

M3 - Article

SN - 0030-7653

VL - 76

SP - 945

EP - 969

JO - Oxford Economic Papers

JF - Oxford Economic Papers

IS - 4

ER -

Automation and taxation

Abstract

Bibliographical note

Data Access Statement

Keywords

Access to Document

Other files and links

Fingerprint

Automation and Taxation

Cite this