Automation Taxes Should Focus on Workers, Not Robots

The new tax law could speed up the number of factories that choose to use robots, rather than human workers, to manufacture goods.

The law, which allows for 100 percent expensing of new and used equipment for five years, will likely mean that factories will increasingly replace workers with automation. That prospect has spurred some thinkers, including Bill Gates, to suggest that robots that take jobs away from humans should be taxed.

That would be a simplistic response to a complex problem, Robert Kovacev, a partner at Steptoe & Johnson LLP said. That tax would ultimately be borne on the people who buy the products those robots make, he said.

“Robots don’t have money. They don’t earn wages,” Kovacev said. “It’s consumers that lose. It’s consumers who pay the robot tax.”