This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.
Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...
Whether San Francisco should adopt an automation tax to replace taxes lost to automated jobs is the subject of a hearing proposed by a supervisor backing CEO pay surcharges.
In practice, an automation tax could mean companies continue to pay payroll taxes on machines to fill gaps for services and education, Supervisor Jane Kim said March 14. The ongoing tax could be benchmarked against the payroll tax for the job automation supplants.
“Replacing humans with machines will generate trillions of dollars in new profits for a tiny handful of corporations driving this automation. We must start redirecting a small percentage of these new profits to retrain and then re-employ human beings that are being replaced by these machines,” Kim said during the Board of Supervisors’ meeting.
A working group will explore how to address the “automation that is coming” and is increasingly replacing jobs, contributing to the wage gap and shrinking the middle class, she said.
No date was given for when the hearing will be held.
Microsoft Corp. co-founder Bill Gates earlier this year proposed taxing robots for jobs they replace, much as human salaries are taxed, Kim said.
“I think that this is an idea worth exploring,” Kim said in introducing the legislation. “We need to ensure that the massive new wealth created by automation is redirected into investing in education and training displaced workers for the jobs of the future.”
Technology and innovation are “racing ahead of our public education system,” Kim said.
San Franciscans last fall approved two tax measures to support community college—the first to increase the transfer tax for property sales exceeding $5 million to help fund free education for City College of San Francisco students and the second a parcel tax increase to benefit CCSF.
While San Francisco is considering an automation tax, the European Union in February abandoned plans for a robot tax and instead urged Parliament to devise rules addressing legal and ethical issues around robotics.
A 2016 Oxford University report forecast that 47 percent of U.S. employment is at high risk of imminent automation in the next decade, Kim said.
The $15 billion robotics industry is expected to increase to $67 billion by 2025, according to Boston Consulting Group figures.
Automation is replacing accountants, lawyers and other professionals, in addition to drivers, clerks and manufacturing workers, Kim said.
Productivity gains, largely through automation, were responsible for 87.8 percent of jobs lost in 2000-10, Ball State University’s Center for Business and Economic Research reported in 2015.
The tax is the latest Kim has proposed since January. The San Francisco City Attorney’s office is drafting language on legislation Supervisors Kim and Hillary Ronen requested Jan. 24 to assess publicly traded companies a surcharge to target the gap between workers’ and chief executives’ pay.
The San Francisco legislation would be similar to what Portland, Ore., adopted last year that has a 10 percent penalty for CEO pay that is 100 times the median worker’s pay. The San Francisco ratio hasn’t yet been determined.
Supervisors on March 14 unanimously approved a resolution—also by Kim—urging the San Francisco Employees’ Retirement System to define executive compensation to include all compensation, not just salary. The resolution also asks the $20.2 billion fund to develop guidelines to evaluate CEO compensation and CEO-to-worker pay ratios.
The pay resolution urges the retirement board to report to supervisors by Dec. 1 the list of companies violating the excessive pay guidelines. It returns to the full board March 21 for a final vote.
To contact the reporter on this story: Joyce E. Cutler in San Francisco at JCutler@bna.com
To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bna.com
Copyright © 2017 Tax Management Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to books@bna.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to research@bna.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)