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Old 06-18-2017, 03:53 PM
 
5,902 posts, read 4,404,170 times
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Quote:
Originally Posted by MrRational View Post
What you're referring to is the businesses paying something extra to compensate
for needing only 90 employees only 10 of which are low skilled...
rather than the 900 that sort of business once needed to employ; most of which were low skilled.

To the degree the business has a responsibility to the community in which it exists
and to the country as a whole (and it surely does) and by that to pay a fair set of taxes...
the people, the community and the country as a whole first owe a loyalty to themselves. Ourselves.

We've been remiss in accepting this responsibility for at least forty years.
Then perhaps the consumers should choose to not do business with companies that use the robotics mentioned if they don't agree with it. As Sam Walton said, The consumer is the ultimate boss and they can fire everyone from the CEO on down simply by spending their somewhere else.

And a "fair" set of taxes in the minimum they owe under the law. If they're compliant, and the people still don't like the result, then change the law. Otherwise, they should not have to pay one red cent more than required.

The business has responsibility to the stake holders, but they are ultimately bound to maximize shareholder wealth. If they can do that with robotics Safetly and within the law, and their customers deem it acceptable, what's the issue?

Value creation is the point of business. Any attempt to restrain value creation hurts the economy overall. It reminds me of the famous Milton Friedman comment when he asked the Chinese advisor why they used shovels instead of machines on the project and they replied that it was because this was a jobs programs. He then replied, why not just give them spoons then?

Last edited by Thatsright19; 06-18-2017 at 04:14 PM..
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Old 06-18-2017, 04:19 PM
 
Location: Ohio
24,623 posts, read 19,092,469 times
Reputation: 21738
Quote:
Originally Posted by Geezerrunner View Post
But the robots are not paying income tax, or rather the companies that increase their level of automation do not pay extra taxes when workers are laid off and replaced by robots.
At the end of the day, robots are merely assets. You want the government to start taxing business assets?

Can you say Slippery Slope?

Robots cause expenses to decline, increasing the profit margin for companies. Companies will pay taxes on that, once depreciation is exhausted.

I think some people worry way too much over automation.
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Old 06-18-2017, 04:34 PM
 
Location: The Triad
34,090 posts, read 82,675,254 times
Reputation: 43653
Quote:
Originally Posted by Thatsright19 View Post
Then perhaps the consumers should choose to not do business with companies that...
Go for it. Tell us how that works out.
---

In the mean time...
What the "consumers" should choose to not do is continue to create so many more of themselves
and regardless of where the robots are that WILL BE producing most of the goods available.

What the smarter set of "consumers" should choose to do, those who can see the issues
and the complications beyond the end of their own nose, is to not encourage and support
the others as they otherwise would continue to create so many more of themselves.

Focus on your kids and grandkids being one of the 90 and not the 900.
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Old 06-18-2017, 05:12 PM
 
5,902 posts, read 4,404,170 times
Reputation: 13426
Quote:
Originally Posted by MrRational View Post
Go for it. Tell us how that works out.
---

In the mean time...
What the "consumers" should choose to not do is continue to create so many more of themselves
and regardless of where the robots are that WILL BE producing most of the goods available.

What the smarter set of "consumers" should choose to do, those who can see the issues
and the complications beyond the end of their own nose, is to not encourage and support
the others as they otherwise would continue to create so many more of themselves.

Focus on your kids and grandkids being one of the 90 and not the 900.
I'm not sure why you quoted this at me...but ok.
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Old 06-18-2017, 06:34 PM
 
Location: Paranoid State
13,044 posts, read 13,817,290 times
Reputation: 15839
Quote:
Originally Posted by Geezerrunner View Post
But the robots are not paying income tax, or rather the companies that increase their level of automation do not pay extra taxes when workers are laid off and replaced by robots.
Your assumption is incorrect.

Think of the financial statement of a public company. Wages (plus a bunch of other stuff) is deducted from net revenue, and after some other things happen, the end result is gross income, a provision for income taxes, and net revenue.

When that corporation reduces headcount via automation (or any other means), the deduction for wages from net revenue shrinks. That means gross profit is higher, and the provision for income taxes is higher, and finally net income is higher.

So yes, companies that reduce headcount do indeed pay higher taxes.

Now, to be fair, corporate income taxes are NOT paid based on the public financial statements. They are paid based on trade-secret tax accounting books. Neither you nor I will ever know how much money a given corporation pays in a given year in federal income taxes unless that company issues it in a press release (and they almost never do so.) But the same principle holds: lower compensation expense means higher gross income which means a larger income tax obligation.


But let's go beyond that analysis for a minute. Anyone who has purchased something at retail in a state with a sales tax knows there is a distinction between who pays a sales tax and who bears the economic burden. The retailer actually pays the sales tax to the state taxing authority along with filing appropriate sales tax forms, but you and I as end purchases feel we pay because we have a line item on the sales receipt and the merchant collects the 8% or whatever from us. So, the retailer "files & pays" but the end purchaser bears the economic burden.

Similarly, corporations and businesses in general "file and pay" income taxes, but they do not bear the true economic burden. Who bears the burden? Employees in the form of lower wages, customers in the form of higher prices, and business owners (shareholders) in the form of lower profits. That is, actual people bear the economic burden even though the corporation fills out the paperwork and sends payment to the IRS.
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Old 06-18-2017, 10:06 PM
 
30,000 posts, read 11,586,381 times
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Quote:
Originally Posted by Geezerrunner View Post

But the robots are not paying income tax, or rather the companies that increase their level of automation do not pay extra taxes when workers are laid off and replaced by robots.
So we have more unemployed people being supported by the government which also gave tax breaks to keep the factory. The robots obviously do not eat at local restaurants or buy clothes or furniture in local stores, so they do not support other businesses in the area. This seems likely to be an increasing problem in the future.
If government incentives are tied to maintaining a certain level of employment then they are forcing the factory not to modernize, and not to become efficient enough to compete in an open market.
How do we get the robots to pay taxes?
If automation increases profits income tax will go up for those companies. But things like Social Security will not be funded since the current retirees are paid by current workers.

Some corporation will get the idea of creating their own country. And make everything there and then export to everywhere else. No employees to pay or ex employees to take care of.

Its all going to be a big mess.
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Old 06-18-2017, 11:11 PM
 
Location: Silicon Valley
7,625 posts, read 4,543,947 times
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Quote:
Originally Posted by Geezerrunner View Post
We all want to encourage industries to stay in our own town and provide jobs to local residents, and we all want to encourage companies to build new factories near where we live. By doing so they hire local people who pay taxes, they help support other local businesses, and they pay taxes to municipal and other levels of government.

To encourage new companies to establish plants locally or existing companies to remain it is common for various levels of government to provide tax incentives or direct financial incentives.

But in many industries more and more processes are being automated and robots replacing human workers to improve quality and lower manufacturing costs so that it becomes viable not to manufacture in another country with lower labour costs.

But the robots are not paying income tax, or rather the companies that increase their level of automation do not pay extra taxes when workers are laid off and replaced by robots.
So we have more unemployed people being supported by the government which also gave tax breaks to keep the factory. The robots obviously do not eat at local restaurants or buy clothes or furniture in local stores, so they do not support other businesses in the area. This seems likely to be an increasing problem in the future.

In addition to manufacturing it seems that some fairly low-paid jobs in retail are being lost to either on-line commerce or self check out equipment which I see a lot now in supermarkets, Home Depot and other retailers, and tellers are being replaced by ATM's and on-line banking.

So the issue is that a larger and larger percentage of the population seems likely to be almost permanently unemployed. Unemployment insurance is designed to provide a short term solution until they find another job, not to allow a reasonable level of income for them over many years, and possibly a lifetime without a job.

If government incentives are tied to maintaining a certain level of employment then they are forcing the factory not to modernize, and not to become efficient enough to compete in an open market.
How do we get the robots to pay taxes?
I think you've drawn up a decent summary of a phenomenon, though I'm not sure the solution fits it. An earlier poster noted how agriculture and the % of labor has dropped an astonishing amount, showing that there are other uses for labor correctly. However, the shift of taxation also moved from one mainly achieved from taxing land to once that is achieved in taxing labor.

Regardless, the flaw in taxing automation is that any country that does so puts itself at a disadvantage to all other countries that do not do so. Rather than a tax, there should be a spread of IP. That is, a cook from one restaurant learnes skills that can transfer to another, hence there is no ability for one company to monopolize a restaurant industry. Machines don't transfer information. Workers also don't jeopardize a company's solvency by requiring debt outlays.

Structuring a tax system more on risk factors (tax on patent information, regional monopolies, tax on non-recourse debt) may be a better way of approaching upcoming taxation.
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Old 06-19-2017, 05:07 AM
 
7,898 posts, read 7,088,773 times
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Any plan to tax "robots" would require a precise definition of a robot. I suppose something like a welding machine that had arms and tools attached would clearly be a robot. What about a CNC machine? Is it a robot if it is run by a computer? Is it a robot if it has a human operator? How about a lathe? Is that a robot? If not, does it qualify if it is computer controlled?


In olden times, craftsmen used hand tools, then factories used water wheels and drive belts to power tools, then electricity. Which are robotic?


How do you tax a robot? When the business buys it? When they use it? When they have it?


The whole idea is just plain silly. People being afraid that robots will take over their jobs is not silly.
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Old 06-19-2017, 06:11 AM
 
Location: New York Area
34,679 posts, read 16,724,788 times
Reputation: 29811
Quote:
Originally Posted by Geezerrunner View Post
We all want to encourage industries to stay in our own town and provide jobs to local residents, and we all want to encourage companies to build new factories near where we live. By doing so they hire local people who pay taxes, they help support other local businesses, and they pay taxes to municipal and other levels of government.....

But the robots are not paying income tax, or rather the companies that increase their level of automation do not pay extra taxes when workers are laid off and replaced by robots.....

If government incentives are tied to maintaining a certain level of employment then they are forcing the factory not to modernize, and not to become efficient enough to compete in an open market.
How do we get the robots to pay taxes?
Excellent point. There should be withholding taxes on robots. Also we are giving tax breaks for the "investments" that finance the construction and purchase of robots so I think they should be taxes.

The question, and only partially sarcastic, is how do we calculate exemptions and other human-applicable figures for robots in determining their "income taxes"?
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Old 06-19-2017, 07:03 AM
 
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
44,298 posts, read 80,577,144 times
Reputation: 57273
Quote:
Originally Posted by jbgusa View Post
Excellent point. There should be withholding taxes on robots. Also we are giving tax breaks for the "investments" that finance the construction and purchase of robots so I think they should be taxes.

The question, and only partially sarcastic, is how do we calculate exemptions and other human-applicable figures for robots in determining their "income taxes"?
That's right, there are tax breaks. It makes no sense to give a tax break and then add a tax on the same thing.
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