Posted: October 24th, 2022

Human Labor Versus Robots

Human Labor Versus Robots

The idea that robot automation and software can replace human labor may seem obvious
to people who are involved in the automotive manufacturing field. On the other hand, there has
been a growing concern by the majority of people over the future of employment in the
technological era. Many believe that the advancements are responsible for the jobs being lost and
destroyed which have contributed to the stagnation of median income. The growth of income
inequality is mainly being attributed to the technological advancement in the United States.

Implications on corporate tax

The US Tax policies encourage the use of robots and other automation which is changing
the types of jobs available. Computers have replaced many middle-income jobs such as
bookkeeping. Jobs that require problem-solving skills and computers have rapidly increased and
are aided by computers. Human labor has been left to compete for the little spaces left in the
fields of service work such as restaurant workers. The middle-class who are the majority have
been robbed of employment chances by replacing them with machines. With no employment, it
means fewer tax returns for the US government since there are no people to tax. The bulk of
taxes in the US are remitted by taxation of human labor income. Robots, on the other hand, are
yet to be taxed which translates to the reduced tax base for the government.
How tax reform will improve human welfare

US tax policies encourage the use of automation. Robots and software are considered to
be more productive than human labor resulting in a higher capital income. However, capital
income is taxed at much lower rates than that of labor income. To be fair to the population that
will lose their jobs, a reform to tax the machines should be made. The tax will be used to provide
a universal basic income which will support the labor force that will be replaced by the

HUMAN LABOR VERSUS ROBOTS 3

machines. The US tax policies should not encourage the idea of automation until the reform to
tax the robots is passed into a policy.

Beneficiaries of tax reform

The reform to impose the tax on the robots would greatly benefit the middle-income
earners who will be affected by the transition. Currently, only high-income earners, business
owners, and the governments are benefiting from taxes. By taxing the robots to compensate
human labor, the middle-income earners will have a chance to open up their businesses with the
money they receive. Besides starting up their business, they will be saved from work injuries
especially for those working in factories. Secondly, business owners will equally benefit because
they will not have to cover for employee injuries at the workplace hence increasing safety.

Reflection on why the reform is yet to be adopted.

In my opinion, the reforms to tax robots may not be taking place soon. The high
productivity associated with the use of automation will lead to the growth of the businesses and
the companies. The extension will require human labor who will deserve higher salaries. Taxing
the robots will mean that many companies will be reluctant to use automated machines. Without
taxing the robots, the growth in business which will attract higher wages will earn the
government higher revenue from taxing both capital and labor income. The government will
want to leap higher revenue, and I feel that it encourages automation for the same purpose.
Manufacturers face the risk of higher expenditure through taxation, payrolls, and compensations
with increased productivity.

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