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Joachim Englisch

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Joachim Englisch

It is generally assumed that already in this decade, the use of labor-saving robots and robotic systems with implemented artificial intelligence will lead to a dramatic transition of the workforce across all sectors of production and services. This development is likely to result at least temporarily in reduced wage tax and payroll tax revenues, increasing income inequality and a disruption of the labor market. Against this backdrop, the idea of taxing the use of robots that replace human workforce, or even taxing the robots themselves, has emerged in politics and scholarly writings. Several justifications have been brought forward by its proponents: the robot tax has been regarded, respectively, as a corollary to a soon-to-be-expected concession of legal personhood to robots, as a tax on imputed income earned by means of the robot, as an equalization levy to restore the level playing field regarding the taxation of robots and of human workers, as an instrument for economically efficient wage compression between winners and losers of automation among the human workforce, or as a corrective tax to slow down the disruption of the labor market. This Chapter analyzes all of the aforementioned proposals. It comes to the conclusion that the case for taxing robots or their use is relatively weak, though, except when specific conditions are met. Currently, and very likely also at least for the remainder of this decade, there is no compelling argument to confer the status of taxable person upon robots. Moreover, significant objections can also be raised regarding suggestions to tax the use of robots. In particular, proponents of a robot tax tend to underestimate how capital mobility and international tax competition could easily undermine the respective objective of such a tax. At least absent any internationally coordinated approach, taxing the use of robots will therefore either have a limited field of reasonable application, or it should only be considered as a provisional measure of last resort.