Corporate Taxation on Automation

When companies replace human workers with AI and automation, they boost their profits while workers lose their livelihoods. Rather than forcing individual workers to absorb the costs of technological displacement, we must tax corporate AI beneficiaries to fund the social investments our communities need.

The Robot Tax

Senator Bernie Sanders has proposed a robot tax, drawing on ideas initially suggested by Microsoft founder Bill Gates.¹ While defining what constitutes a “robot” or AI system for tax purposes presents technical challenges, the basic principle remains sound: when firms replace human workers with automated systems, they should pay taxes supporting those displaced workers and funding the social infrastructure our communities need.¹

The revenue from automation taxes should support socially valuable work unlikely to face automation soon:

• Education - investing in the next generation
• Childcare - enabling parents to work and children to thrive
• Elder care - supporting our aging population with dignity
• Mental health counseling - addressing the crisis of isolation and anxiety
• Community-building initiatives - strengthening the social fabric

These are precisely the human-centered services that AI cannot replicate and that our society desperately needs.²

International Models

South Korea provides an international model worth examining. That nation has implemented reduced tax deductions for automation investments that replace workers, redirecting the resulting revenue toward caregiving expansion.² This approach simultaneously:

• Disincentivizes displacement by making automation relatively more expensive
• Funds human services that create quality employment resistant to automation
• Ensures workers share in the productivity gains from technological change

The Current Tax Code Favors Automation

The tax code already favors automation investment through accelerated depreciation for equipment. Companies receive tax breaks for purchasing machines that replace workers, while workers who lose their jobs receive inadequate support. We must counterbalance these automation subsidies with taxes that fund worker transition and social investment.

A Matter of Basic Fairness

Corporate profits are soaring while workers struggle. When Amazon replaces warehouse workers with robots, when call centers replace representatives with AI chatbots, when law firms replace paralegals with document automation—the companies profit and workers suffer. Automation taxes ensure that technological progress benefits everyone, not just shareholders and executives.

If a robot takes your job, the company that fired you should fund your future.

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