The president of French retail giant E.Leclerc recently proposed that the government impose a “robot tax” to help fund the social security system. His call has brought the idea of taxing robots back into the public spotlight. In recent years, the rapid advancement of robotics and artificial intelligence (AI) has sparked concerns over potential mass unemployment. As a result, some have suggested taxing robots and AI systems as a way to support those who may lose their jobs.
However, the proposal raises a number of complex questions and controversies—such as how to define what qualifies as a “robot” and how such a tax would be implemented. Critics argue that taxing robots could hurt corporate profits, slow innovation, and reduce job creation. Some even warn it could put a country at a disadvantage in the global tech race. At the heart of the debate lies a difficult balance between social equity and technological progress—a policy dilemma with no easy answers.
From “Machine Tax” to “Robot Tax”
“Taxing robots is nothing new. My father told me that back in the 1950s, many students were already debating the idea of a ‘machine tax,’” said Roland, a Berlin-based IT expert, in a recent interview. Over the decades, the concept has evolved from a “machine tax” to a “robot tax” and even an “AI tax.” Politicians and scholars in Germany and across Europe have repeatedly debated the issue, but no consensus has ever been reached.
In 2017, the European Union rejected the idea of a “robot tax.” According to Reuters, that year members of the European Parliament called for legislation to establish an ethical framework for the development and deployment of robots across the EU. However, they voted down a proposal to impose taxes on robot owners. The decision was welcomed by the robotics industry, which argued that such a tax would hinder innovation, reduce corporate revenues, and ultimately lead to job losses.
In January of this year, Yahoo News reported that critics of the robot tax also believe it could put countries at a disadvantage in the global technology race. According to Bloomberg, in August of last year, major tech companies like Amazon lobbied U.S. lawmakers against strict regulations, warning that such measures could stifle innovation. In 2023, some lawmakers in New York State proposed a robot tax, but the legislation failed to gain traction. Meanwhile, the influential Teamsters union called on state legislatures nationwide to require that licensed drivers operate autonomous commercial trucks deployed by companies—yet no state has enacted such laws.
The Guardian previously reported that American venture capitalist Albert Wenger argued one of the biggest challenges in implementing a robot tax is defining what qualifies as a robot. “The first example in modern history might be the power loom. Was it a robot, or just a tool?” he asked. Similarly, he pointed out that mechanization has reduced the need for labor in agriculture—“Should we have taxed tractors?” Wenger added that software that once required 20 engineers to build can now be completed by just three. “That’s not because of robots, but because of open-source code. So, should we tax open-source software?”
Wenger’s questions are valid. However, with the rapid development of AI in recent years and its potentially massive impact on the job market, the debate over whether AI and robots should be taxed has resurfaced. Some political and business figures argue that a “robot tax” or “AI tax” is necessary, as these technologies may lead to large-scale unemployment. Tax revenue from companies that use such technologies could be used to fund a Universal Basic Income (UBI), helping to offset the disruptive effects on human labor.
According to The Hindu, in July last year, a group affiliated with the Rashtriya Swayamsevak Sangh (RSS)—the ideological parent organization of India’s ruling Bharatiya Janata Party—called on the country’s finance minister to introduce a robot tax to support workers displaced by automation. In Germany, political parties such as the Greens and the Left, as well as various anti-automation groups, have voiced clear support for imposing a robot or AI tax.
O’Brien, a computer science professor at the University of California, Berkeley, wrote in an online post that one potential way to address unemployment caused by AI and robotics is for the government to implement universal basic income. The challenge, however, is funding. The U.S. tax system relies heavily on personal income taxes, but if AI and robots put more people out of work, that revenue base will shrink—just as the demand for social welfare surges. O’Brien argues that if AI systems and robots are going to replace human jobs, then they should also take on the responsibility of paying taxes.
O’Brien’s view has gained significant support. As early as 2017, Microsoft founder and tech billionaire Bill Gates proposed the idea of taxing robots. That same year, Shigeki Morinobu, a chief researcher at the Tokyo Foundation, suggested taxing patents for AI and robotic technologies developed with government support. “South Korea took the first step toward a robot tax,” The Korea Times reported. In 2017, the Moon Jae-in administration included in its revised tax code a reduction in tax incentives for companies investing in automation equipment. While not a direct tax on robots, industry experts noted that it reflected a similar approach, as both measures target automation in the workplace.
Responding to concerns that a robot tax could hurt corporate profits and stifle innovation, O’Brien pointed out that when a company hires human workers, it must pay salaries and employment taxes. If AI systems or robots do the same work, the company pays no wages, and the effective tax rate for machines is far lower than that for humans. O’Brien offered an example: if a business currently pays a human employee $50,000 annually plus $10,000 in income tax, in the future it might deploy 10 AI systems, each taxed at $10,000. That would allow the company to perform ten times the work at one-sixth the cost—while the government still collects the same amount of tax revenue.
Perry, who previously served as the Associated Press’s regional director for Europe, Africa, and the Middle East, holds a bachelor’s degree in computer science from the University of Pennsylvania and a graduate degree in the same field from Columbia University. He argues that taxing AI systems or robots is similar to taxing industries like tobacco.
Perry explained that governments around the world impose heavy taxes on tobacco products to reduce consumption and offset the social costs of smoking, such as healthcare expenses. These taxes are designed to discourage harmful behavior while generating revenue for public health, and few people raise concerns about how such taxes interfere with free markets.
Taxing Based on “Human Equivalent Effort Time”?
So how should an “AI tax” or “robot tax” be implemented? Perry believes it’s unreasonable to tax companies that use AI systems or robots at the same rate as, say, a burger chain. The former, he argues, should pay a higher cost—for example, companies operating autonomous taxi fleets could be subject to a 25% surcharge. He also suggests the need for a global coalition on this issue, ideally facilitated by the United Nations, to foster dialogue and build a consensus toward a global AI tax framework that transcends geopolitical divides.
In his writing, O’Brien introduced the concept of “Human Equivalent Effort Time” (HEET)—the amount of time it would take a human worker to complete a given task. While he did not lay out specific details on how companies would be taxed under this system, he proposed a broad framework: instead of reporting employee wages to tax authorities, companies would declare the total HEET value produced by their AI systems or robots and pay taxes accordingly.
O’Brien believes that using the HEET unit to tax AI labor could create an alternative revenue stream to traditional income tax. Unlike human labor, AI systems can be replicated and scaled with minimal cost and without the usual hurdles of hiring or training, making productivity growth far easier. As AI and robotics continue to grow in scale and efficiency, this tax model could help ensure steady fiscal revenue. He also noted that taxing AI could burden small businesses, but this could be addressed through policy design—for instance, exempting companies with annual revenues below $1 million from such taxes.
According to The Guardian, former Greek finance minister Yanis Varoufakis and several economists argue that companies manufacturing robots or adopting labor-replacing technologies benefit significantly from public investments. In essence, they are profiting from research and intellectual property developed by publicly funded institutions like universities—making a “robot tax” a way to correct this free-rider problem.
However, Varoufakis proposed an alternative to a “robot tax”: requiring publicly listed companies to transfer a portion of their shares to the government. The returns on these shares would be collectively owned by the public and used to fund a Universal Basic Dividend (UBD). UBD is a variation of Universal Basic Income (UBI), but instead of being funded through taxation, it draws from capital investment. A similar model has been in place in the U.S. state of Alaska since 1976, where a portion of oil revenues is distributed to residents via the Alaska Permanent Fund. The UBD would function similarly but apply to investments across all sectors. “This would allow the whole society to share in the gains. No new taxes, no complicated tax laws, and no disruption to a country’s existing financial system,” said Varoufakis.
“Let Workers Share in the Profits of AI Ownership”
There is no consensus among scholars and business leaders on whether the widespread adoption of AI and robotics will lead to mass unemployment. According to Globo, a Brazilian media outlet, as much as 47% of current jobs could eventually be replaced by AI or automation. Goldman Sachs has estimated that AI could eliminate 300 million jobs globally, affecting roughly 25% of the labor force.
“We tend to overestimate the impact of new technologies on employment,” said Gary Hamel, a visiting professor at the London Business School, in an interview with Business Insider. He noted that in the past 50 years, only one job category in the U.S.—elevator operators—has completely disappeared. Similarly, Handelsblatt in Germany reported a study predicting that by 2035, in a fully digital working world, Germany could lose around 1.5 million jobs—but create roughly the same number of new positions. Focus magazine noted that Germany is currently promoting the use of care robots in the healthcare sector, but this is not expected to result in large-scale layoffs. According to the Federal Statistical Office, the number of nurses in Germany is projected to reach 1.49 million by 2049—an increase of 250,000—while the number of people needing care is expected to rise by 2.6 million. This suggests that automation will supplement, rather than replace, human workers in this field.
Quinn is someone who actually lost a job because of AI. As Business Insider reported in May this year, he had been working at a startup where he managed a team and oversaw the outputs of an AI system. As the system improved, his role became redundant, and he chose to leave the company. However, Quinn does not believe his experience signals an impending wave of mass unemployment. A veteran of LinkedIn, Apple, and Amazon, he believes the real impact of AI should be understood not by identifying entire jobs or industries likely to be disrupted, but by analyzing the specific tasks and work types that will change. Like past technological shifts, AI will bring some turbulence, but people can learn to collaborate with it. The focus, he argues, should be on how workers can make use of the time saved through automation. Today, Quinn serves as a senior director of operations at an AI search platform.
According to Forbes, reports by PwC and others predict that AI will fundamentally reshape the global labor market by 2050. As much as 60% of existing jobs may require major adjustments. To address these challenges, Shen Yang, a dual-appointed professor at Tsinghua University’s School of Journalism and School of Artificial Intelligence, told that governments should take the lead in building “AI + Human” platforms. These platforms would offer short-term, precise tasks, break down rigid job structures, and foster closer interaction between humans and AI. “I believe companies should make workers partners in human-AI collaboration,” Shen said. “Dividends should be shared based on AI utilization and human contribution. Workers should be allowed to share in the ownership of specific AI algorithms or models they help train, participating across projects through flexible contracts. This approach enables fragmented time use and aggregated talent deployment.”
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