Unmanned Systems Technology 026 I Tecdron TC800-FF I Propellers I USVs I AUVSI 2019 part 1 I Robby Moto UAVE I Singular Aircraft FlyOx I Teledyne SeaRaptor I Simulation & Testing I Ocean Business 2019 report

98 PS | A tax on robots P roposals to put a specific tax on robots, promoted by luminaries including Bill Gates, are confused and likely to be counterproductive (writes Peter Donaldson). The idea is attractive because it seems to address the problem of a shrinking tax base caused by robots replacing tax-paying humans in the workforce. However, it overlooks the real relationship between taxation and government funding, and ignores the complexities of defining robots for tax purposes. The orthodox view is that taxes fund government spending, but that isn’t true for currency-issuing governments. They spend by issuing currency, their every payment is made with new money, and they don’t wait for tax revenue to come in before they spend. Taxation therefore removes some of that money from the economy to prevent inflation. Also, the obligation to pay tax in the government’s currency creates a base level of demand for it. Likewise, government ‘borrowing’ in its own currency, in the form of interest- bearing bonds, does not fund government spending. Instead, it is a means of taking money out of circulation while providing safe assets for the financial sector. The orthodox view only applies to governments that don’t issue the currencies in which they tax and spend. These include the members of the Eurozone. However, the EU as a whole is a currency issuer and owns the European Central Bank – the source of the euro. This description of how governments finance themselves is central to modern monetary theory, an approach to economics that is presenting an increasingly powerful challenge to the mainstream. Robots can be hard to define for tax purposes. Most of us think of them as computer-controlled mobile machines, but many computerised entities that replace human labour are just software. There’s a risk then that unmanned vehicles would be disproportionately affected by robot taxes because they are easily identifiable as robots and therefore easy to target. Unmanned systems are creating new markets though their ability to go places and do things that manned systems cannot do safely and economically, so a tax on robots could hurt the development of these new fields of activity and the jobs that depend on them. The effects of a robot tax on government spending power would differ between countries that issue their own currencies and those that don’t. In a country with its own currency, they would discourage the adoption of robotics without affecting the government’s spending power. In a nation without its own currency, such as a member of the Eurozone, tax receipts would add to the government’s spending power, but they would shrink as their discouraging effect on robotics took hold. Not only would robot taxes not do what their proponents say they would – increase government spending power – they are also aimed at the wrong problem. The real damage to the economy from the destruction of jobs, and the attendant human cost, would come from the collapse in income for millions of people, leaving them with little or nothing to spend. That would be disastrous for capitalist economies that run on sales. It isn’t technology in general or robots in particular that is destroying well-paid secure jobs and threatening livelihoods, it’s economic policy driven by political priorities. The solution lies in finding ways to embrace the productivity of robots and to distribute the fruits of their labour fairly. Such solutions can only be arrived at through politics and economics. Now, here’s a thing “ ” Not only would robot taxes not do what their proponents say they would, they are also aimed at the wrong problem June/July 2019 | Unmanned Systems Technology