"Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, social security tax, all those things. If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level." -- Bill GatesGates is suggesting taxing robots as a way of financing the retraining of displaced workers -- not as a measure to inhibit their introduction. But, of course, taxes act as disincentives for the taxed activity as well as revenue generators.
Tim Worstall thinks taxing robots is a bad idea "because we don't want to tax production at all." What does Worstall propose instead of taxing robots? "Exactly the same places we get the tax revenue from today, from some combination of everyone's incomes and or consumption." Worstall believes that since the introduction of robots will increase aggregate production, that will automatically increase tax revenues to offset the lose of tax revenues from the incomes of workers displaced by robots.
Unfortunately for Worstall's argument, he fails to distinguish between physical production and value production and as a consequence overlooks the question of distribution of the latter. There may be a larger quantity of goods and services produced, having a greater aggregate value but a larger proportion of that value may consequently be sheltered from taxes. In fact, it probably is because of tax policies that seek to encourage investment (not to mention tax havens and other loopholes).
In short, taxation is not some exogenous distortion imposed on a fine-tuned, market-based economic machine. It is part of the underlying structure. Whether or not "taxing robots" makes sense, Gates's comments address a real conundrum. Changing the income shares of capital and labor has an impact on tax revenues that is not automatically compensated by aggregate growth of GDP.