back to article Korea extends factory automation tax break, is accused of levying 'robot taxes' anyway

It's not quite a “robot tax”, but South Korea appears to be sufficiently worried about the impact of automation on its workforce to consider withdrawing tax breaks for manufacturers that buy “robots”. As one of the world's major factory nations, South Korea country is concerned that a too-rapid expansion of automation in heavy …

  1. AndyS

    > the former Microsoft man wondered why human labour is taxed but robotic replacement workers contribute nothing to government coffers

    That's an interesting question, but I guess it's missing the point slightly. Tax is levied on exchanges, so the purchase, maintenance, leasing payments, spare parts etc required for automation will all all be taxed. The idea of taxing a tool would be obviously ludicrous - what, fundamentally, sets apart a hammer, a tractor, and an automated riveter?

    1. cbars

      What about taxes levied on your death? Or for using a public highway (council tax etc)?

      You're not exchanging anything there (at the point of taxation, as you're not on the flipping highway). Tax is used to collect money to achieve a goal. We don't want to see all employees relegated to benefits with only 1% or less of society with any disposable income.

      So, tax the robots - I'm with Bill.

    2. Anonymous Coward
      Anonymous Coward

      The taxes that go through the business accounts can be avoided whereas employee taxes cannot.

  2. Anonymous Coward
    Anonymous Coward

    Robots don't pay taxes...

    ...and neither do the 1% who are stashing their profits in offshore tax havens.

    So when there are no jobs and all the cash is funnelled to the top, who is going to have any money to pay for stuff and then where will the rich make their income?

    Looks like Korea was trying to change this and, yet again, big business influenced government to change their mind to protect their wealth.

    1. jmch Silver badge

      Re: Robots don't pay taxes...

      "Looks like Korea was trying to change this..."

      Not really, they're nor taxing robots. They're removing tax subsidies from robots. Actually, not even that, they're planning to reduce tax subsidies for robots, and not even now but in a year or two.

      As to "should robots be taxed?" - What exactly is being taxed? Robots are capital equipment, and the capital invested in them has already been taxed*. Also, being capital equipment, companies can list their cost and depreciation as business expenses and offset that against taxable profits. Bottom line being they don't pay tax on the value of the robots, and if capital gains taxes were the same as company taxes, the company is paying exactly zero in taxes. With some clever tax-jiggery-pokery I'm sure that big companies can afford, they probably net a tax profit off robots even without official tax deductions.

      But I believe that what is being proposed isn't to tax their value, but to tax their WORK. Since robots don't earn a salary, some way needs to be arrived at of determining the value of their work. But if you're taxing the value of work that a robot does, why not that of a computer**? Of a vehicle? In fact of any tool that an enterprise uses? The bottom line to all of this is that trying to tax robots would create a gigantic administrative and beaurocratic mess. Much simpler to just marginally increase company tax. And then watch the cmpanies do some more jiggery-pokery to pretend they're not making any money, at which point they don't care how high the tax rate is.

      If you really want to incentivise companies to hire more people, give them a tax break based on number of employees instead of a tax break for investment in robots.

      And if you really want some social justice, forget messing about withthe fine detail of the tax code and fix the giant tax loopholes.

      *Typically at a lower rate than earned inome... I believe earned income, dividend income, capital gains etc (all types of income in fact) should all be taxed at the same rate, but that's a discussion for another time.

      **If a robot is replacing manual labour and a computer is replacing white-collar labour, why tax one and not the other?

    2. Anonymous Coward
      Anonymous Coward

      Re: Robots don't pay taxes...

      Robots don't pay taxes......and neither do the 1% who are stashing their profits in offshore tax havens.

      Wow! Where do people get such stupid ideas? Even with all the tax avoidance scheming, in the UK, the top 1% pay more than 25% of all income tax collected, and the top 10% pay more than 50% of all personal taxes.

      1. AndyS

        Re: Robots don't pay taxes...

        AC, those are interesting stats, care to share where they are from?

      2. jmch Silver badge

        Re: Robots don't pay taxes...

        According to Credit Suisse studies, the richest 1% in the UK own 24% of the wealth in UK. BUT also keep in mind that those %ages are of KNOWN wealth. Any accounts that people hold in secretive offshore jurisdictions will by definition be unkown and would not fall in either the numerator or denominator that make up the 24%. So the real number is likely to be higher.

        "in the UK, the top 1% pay more than 25% of all income tax collected",

        If that's true, then even ignoring all the hidden offshore money, they are just about paying a proportional share, in spite of all the tax bands designed for richer people to pay a bit more.So it's likely that a fair amount of them are using advantageous tax credits, legal loopholes etc.

        Incidentally, the richest 1% of people in the world own about 50% of the world's wealth, so UK inequality isn't that bad. World figures are skewed by gigantic inequalities in Russia, China, Middle East etc. Also keep in mind that worldwide, top 1% is 70 million people. If you're reading this, the likelihood is that you are an IT professional in a 1st world English speaking country, so most probably, you are in that 1%

        1. jmch Silver badge

          Re: Robots don't pay taxes...

          "in the UK, the top 1% pay more than 25% of all income tax collected"

          Also note that that's 25% of INCOME tax, which is about 25% of all tax collected. NI (around 20%) and VAT (well over 30%) together rake in more than double the take from Income tax. Both these taxes are regressive. So teh real %age of all taxes being paid by richest 1% will be a lot less than 25%

    3. maffski

      Re: Robots don't pay taxes...

      You're right. Robots don't pay taxes, and they never will. Only natural humans pay taxes as natural humans are the destination of all economic consumption.

  3. David Roberts Silver badge

    Combined harvester

    Replaces a lot of agricultural workers.

    There are major cost savings over maintaining or hiring a manual work force.

    Should they be taxed at the rate of all the people they replace? (Minus, of course, all the healthcare and other infrastructure costs requied to maintain wetware.)

    The general principle that industry should bear their fair share of the running costs of the country seems reasonable.

    Taxing robotics seems unduly specific.

  4. DougS Silver badge

    Taxing robots is not really practical

    You'd have to define what a robot is, and decide whether the tax is based per robot or per person it replaced. Not to mention are you going to go back and tax the robots who have already replaced people. Is pure software (like an IVR system that answers phones and directs calls) a robot? It is replacing people, after all.

    Clearly if technology reaches a point where large segments of the population are effectively unemployable because robots are better, we'll have to figure something out. I don't think taxing robots is the answer. That's trying to shoehorn the existing system of taxing wage income into a new world - making the end result (collecting taxes from the income of those who own the "robots") needlessly complex.

    The more complexity you add to a tax system, the greater latitude there is for various schemes and loopholes. Imagine you have a definition of 'robot' in your tax code and Boeing manages to avoid having anything defined as such, so it pays no robot taxes even as produces many billions of dollars worth of aircraft every year in its fully automated factories.

  5. strum Silver badge

    “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing”

    Jean Baptiste Colbert

  6. Robert D Bank

    tax should simply be rated inverse to the positive overall social gain the taxable entity provides, with the definition of gain being decided by the electorate

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