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Home Topics in Depth Economics Automation Could Cause America to Lose 35% of its Tax Base in the Next 20 Years

  • Ichingcarpenter (4151 posts)
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    Automation Could Cause America to Lose 35% of its Tax Base in the Next 20 Years

    he United States is in danger of losing more than one-third of its tax base thanks to increasing automation in both manufacturing and service sectors. Self-driving vehicles, self-serve kiosks, increases in manufacturing and energy production efficiency, and declining retail numbers all contribute to what is likely going to be a significant problem in the coming decades.

    It’s not that automation itself is a bad thing, within our lifetimes we will probably see the majority of our day-to-day activities be automated. However, the transition to an economy based on robots more than people is going to affect those who can ill-afford to lose their jobs the most.

    20 Million
    Conservative estimates put future job losses at 20 million with some estimates going up to as high as 70 million. When someone loses their job, they stop paying taxes, while their employers stop paying payroll and other types of taxes at the same time. Compounding the issue is the fact that many people who lose their jobs start to depend on the economic support of the government, along with their families.

    Take a taxi driver in a medium-sized city for example: They may gross about $65,000/year, of which around $15,000 would be paid in taxes. Their employer is also likely paying around $10,000 in taxes related specifically to that one employee. When that person loses their job, the government loses out on $25,000 in taxes, not even counting the positive economic impact coming from that employee spending their income. Now, that former employee has to request government assistance since every taxi company is moving towards an automated model. $1500/month just for that individual and their family to survive equals a $43,000 swing the wrong way in government revenues. The extra profit generated by the taxi company is taxed at a far lower rate and may very well end up sitting in an investment account, not doing much to foster increased economic activity.

    Multiply those numbers by 20-70 million and it’s easy to see we have a real problem on our hands. Higher taxes on those making less than $250,000/year from all sources would probably compound the problem. Higher corporate and capital gains tax rates would probably alleviate the problem, but while those types of tax increases are supported by a majority of the population, for some reason lawmakers don’t seem to agree.





    Australian shopping centres) may replace cleaners with robots – “Already four weeks into the trial we are seeing some organisational savings in terms of wages”




    Autonomous delivery robots tested in San Francisco [video]



    ‘As well or better than humans’: Automation set for big promotions in white-collar job market – CBC News



    Why no job is safe from the rise of the robots – “including those that require thinking skills we once believed beyond the reach of machines.”




    And Finally


    Self-driving hearse could project holograms of the dead



    xynthee, bbgrunt, 7wo7rees and 2 othersSherman A1, Phlem like this

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7 replies
  • Phlem (643 posts)
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    1. either we get universal basic income or we get


    • Sherman A1 (707 posts)
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      2. More likely the latter

      but you are completely correct.


      "Be Kind; Everyone You Meet is Fighting a Great Battle." Philo of Alexandria
  • NV Wino (5919 posts)
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    3. And this is where guaranteed basic income comes in.

    Housing provided: see the 3D printed house thread.

    National health care provided.

    We, as a species, have to change our mindset. If we continue to value acquisition of that paper green stuff above intellectual and scientific achievement and artistic expression, we will fail.

    Resist-sm_zpswfchkz8t “As we act, let us not become the evil that we deplore.” Barbara Lee  
    • Ichingcarpenter (4151 posts)
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      4. basic income and also tax corporate gains

      Gates wants to tax robots which is stupid


      Writer and basic income advocate Scott Santens also disagrees with Gates’ idea for a robot tax. He says that instead of taxing robots, the government should focus on taxing capital gains and pollution instead of automation.




  • GoodWitch (956 posts)
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    5. With nobody left to tax, maybe the rich will FINALLY be forced to cough up

    Or is that just  a hopeless fantasy?

    Make America THINK again
    • ThouArtThat (6168 posts)
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      6. Within Our Lifetimes – Keep Dreaming


      "In America Today, Power Corrupts and Money Corrupts Absolutely" - Anonymous  
  • FanBoy (7983 posts)
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    7. no profit in automation with labor at low cost

    imo this is fud for the proles