Taxing robots?

Key message: There is a big discussion revolving around the introduction of a robot tax to cope with the following three key concerns:
1. Avoid excessive automation and protect jobs that are only automated because certain current tax systems are
biased in favour of capital;
2. Secure the long-term fiscal sustainability in a scenario where automation leads to massive unemployment;
3. Achieve distributional justice when capital owners benefit disproportionately compared to workers from the
diffusion of automation technologies.

Are these concerns supported by existing empirical evidence?
• No support of the presence of an adverse effect of automation technology diffusion on tax revenues.
• Total labour market effects of automation remain mixed: some jobs are very likely to disappear, while others
are demanded more intensively, and new jobs emerge.
• Distribution matters: certain groups of workers are more likely to be displaced and suffer income losses, while
others are more likely to benefit.
• There is no clear evidence that changes in the tax system have been a driver of excessive automation in Europe.
Takeaway
• A robot tax could be seen as a potential instrument to achieve distributional justice, albeit with various policy
design aspects that remain challenging. However, policy makers should be aware that other existing social
transfer mechanisms and income taxes may be better suited to achieve this.
• Better enforcement of existing capital taxation and alignment with other policies could serve as an alternative
instrument to achieve the same purpose.