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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?
Robots have been around a long time, they make companies more competitive. Most towns or cities have property tax, and a robot is property of a company. It should be taxed at it's legitimate cost to acquire then over time it's depreciated value as any other technological device loses value over time.
Get ready, what is coming next is both scary and delightful
The above is a video of several robots, the first uses facial recognition and offers medication to those who receive it, also if low will ask if you want a refill. Should you not take medication, it can be configured to text a caretaker or doctor informing them you missed medication.
How will we tax these things in homes? How will we tax things that can be used in a home or at work.
Robots are ppe that have ongoing personal property tax, sales tax is paid when it's purchased, and if the robots are generating more value and higher margins that is hit with an income tax.
Do you think combines and other agricultural equipment should pay taxes because people aren't out in the fields harvesting crops with a scythe? Robotics are just mechanization. Robotics have been around for decades. Mechanization has been around for many centuries.
When will people realize that mechanized efficiency doesn't result in fewer workers, but rather frees up workers to do other things? Seriously, we've been having this discussion since a majority of the American workforce was employed in agriculture (ie, the 19th century). Now, less than 2% works in agriculture. Is there 50+% unemployment? No. That's not how markets work.
I would imagine you tax a robot the same way you tax a toaster. There is a sales tax when you buy it and if the robot is generating income, that income is going to some human somewhere. The income that goes to that human gets taxed at that point.
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.
So the issue is that a larger and larger percentage of the population seems likely to be almost permanently unemployed.
If government incentives are tied to maintaining a certain level of employment ...
1) don't use 'government' as though it's some independent entity apart from us.
2) the level is about balance between available people and appropriate work for them.
To the degree that society has in interest in all of this it's in finding that balance between the population levels in total
and the number of human work hours required; whether we're talking about the no/low skill levels of work or the higher levels.
At present we're are NOT in balance. At the no/low level the imbalance is critical and rising daily.
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How do we get the robots to pay taxes?
How do we get the profits/gains from their productivity to the people?
Robots are ppe that have ongoing personal property tax, sales tax is paid when it's purchased, and if the robots are generating more value and higher margins that is hit with an income tax.
Income tax on a machine? Isn't the corporate profit or dividend to shareholders the appropriate place for income tax?
I'm referring to the owners of the machines paying an income tax....
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.
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