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Taxation on robots

While first world nations are facing decline in population growth and eldering of the mean citizen, doubts on the public pension system arise. By 2050 in Europe, it is expected that there will be around 60% of dependent residents, compared to these in working age. This means that the tax burden on working people will be very high in order to pay the pension. 

But also there’s another problem. There’s a chance that highly sophisticated AI and robotization may lead to rise of unemployment, specially within the group age of 40+. Young graduates will easily embrace the new reality, but experienced workers will have it difficult to recycle themselves and catch the new economy. And not because they don’t want. The new robot era will require highly imaginative and specifically educated employees. In order to have the necessary hard and soft skills, young people will perform years for studies. It will not be possible to just swap from one job to another for these 40+ professionals. But the problems is that they are the main source of taxation for pensions.

So if we have aging population and high unemployment within main taxpayer group, how pensions and unemployment subsidies will be paid? The answer to this question should be addressed now in order to prepare ourselves for quite predictable future.

There are some voices that consider taxation of robots. Since robots replace workforce and it is possible to calculate how much real workers a robot is replacing, it’s completely feasible to establish taxation plans on such systems that mimic current labor force taxations.

These taxation plans should take into account the real impact of robotization over workforce, current global economic situations and competitiveness of the companies. Robots are means of production and there were several periods when humanity faced replacement of workforce by machines. But maybe we are approaching the moment when something that characterize the humanity – the human intelligence – is at risk of being replaced by AI. Therefore, we may face the situation when there will be no work that is irreplaceable by machine.

I’m an optimist in this regard. I believe that the level of prosperity robots will deliver to humanity will allow us to disengage from the classic labor relations. All the needs of the person will be covered and people will only be moved to produce and create by their own curiosity, inherent to human being. There will be no fear of being left with no food or home, everything will be covered because robots will be able to create the necessary abundance. The time liberated by robots will be used for creative living and sharing. The money, as we know it, will become less relevant and reputation based on contribution to humanity’s well being will be a real value one will earn.

Should my generation of millenials be scared of the future? I believe that no. I think there are very bright ideas on how society may change thanks to technology improvements. Our goal now is to shape our politics and economy in order to make the growth sustainable and participative.

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