Universal Basic Income and Taxation of Robots

We have entered the era of fastest changing pace in history, and we need to realise that. The changes are not just focusing on one sector, but all of them are changing one way or another. The way we manufacture, advertise, analyse and work in general has changed and this is just the beginning.

Jobs are disappearing and shifting from one area to another, or are being updated thanks to new technologies available. Automation is becoming the biggest “threat” to employment, and even some modern business models are on their way to becoming obsolete.

Also, we can see the evolution from ownership to sharing platforms, and this has big impacts for many businesses. The best example can be seen in cars, which is going through a decline in individual acquisitions and growth in sharing services for both short rides and short rentals.

All this sets many questions and so far we haven’t found many different solutions. The two main ones are: Universal Basic Income and taxation of robots. The first one has many detractors, although there’s a lack of arguments to completely reject this option. For the latter, there’s a need to outline exactly where and how to start this taxation.

Universal Basic Income is being tested in many countries. Finland, for example, has started an experiment providing 2.000 unemployed people with $583 per month, no strings attached. To be honest, if I had to trust someone to test something, that would be the Finnish.

Browsing a bit around the internet you can easily find the benefits and problems solved by setting basic incomes, but it’s a bit harder to find the reasons to deny them. I’ll point out the most important ones to set the context.

First of all, UBI would get rid of (or decrease to an insignificant amount) poverty, for which there should be nothing bad about. If you are worried about the cost of giving the income for free, it will also come with cost saving benefits especially in healthcare and education, areas in which the better conditions for the people, the lower the costs.

Having an income independently of your role or situation and being able to cover the basic human needs would improve anyone’s life. And if you are already rich or don’t need the extra income, hey, just donate it or find some cool use for it (I can give you my Paypal address on request :D).

How many projects and ideas a year are not developed due to lack of funding? How many artists with incredible talent see their performance limited by a low budget? How many people don’t pursue their passion because they need to get a whatever job just to pay bills? With a basic income to cover their main needs, they’d be able to invest all their time and effort on pursuing ideas and projects to improve other people’s lives. Researchers, artists and professions we don’t even know about would perform considerably better if they didn’t need to worry about their fate if their project or idea failed.

Lastly, it’s the perfect solution for the greatest threat: automation of jobs. Jobs are constantly appearing and disappearing, but the rate has shifted. The amount of tasks automation is taking over has increased very fast, and it’s time we get ready for it. It’s not only the jobs we’ll be losing, but also the taxes generated by those jobs will be gone.

Sadly, I do not have (yet) the knowledge to outline how and where to start, and what’s considered a full position replacement. How will we define the amount a robot should pay in taxes? The average that’s being paid for that position? Should we set an hourly price for robots? What about when it only comes to software solutions replacing full teams/departments?

There’s no perfect solution to the problems we’ll be facing in the next 5, 10 or 15 years. But these problems are coming, and we need to face them and start working for the solution providing the greater good.

UBI will have its downsides, and controlling its effects on price raises might be the first one to tackle. Also, there’s the different costs of living throughout the different countries and what are the conditions for receiving which income.

Overall, I’m all up for UBI and will always have my mind open for discussions from any perspective about how effective it would be or even to new solutions. But the one thing I would not agree with is: we do not need to change anything.

-- This post was previously published by me on my Medium account. You can find it here: https://medium.com/@jaimepichardogarcia/universal-basic-income-and-taxation-of-robots-ce62e7fff3d --