News Summary

• Second, if the replacement were made anyway, a robot tax would generate revenues for the government that would cover the loss of revenue from payroll taxes.The Institute’s views on the topic notwithstanding, I think that largely covers the idea in broad strokes, though I would add to it.
• In our calibration, in line with the literature, this income tax turns out to be relatively efficacious, explaining why we find a relatively low tax rate.We didn’t come into this expecting this, and the relatively low number did surprise us.
• But the impact on the wage distribution from automation is a key input for which there is much uncertainty.To your question: At the optimum, you are trading off improving the pre-tax wage distribution with the efficiency losses of the tax, reaching a sweet spot.
• I’m sure there are those who would rather skip the jobs conversation altogether, but I firmly believe that approach is equally problematic.So let’s start from a point I think we can all agree on: Robots have and will continue to impact jobs.
• “In addition, a robot tax would necessitate a definition of what comprises a robot.
• A vast majority of people I speak to believe the impact will be positive — that the robots will either replace bad jobs or at the very least make them better.