Robots Don’t Pay Taxes

Robots don’t pay taxes

-Scott Dennis May 15, 2017

“Winning an election is a good-news, bad news kind of thing. Okay, now you’re the Mayor. The bad news is that you’re the Mayor”. –Clint Eastwood

Where I live tells a story about how people feel about their taxes. We are north of New York City along the Hudson River and walking distance from a small village that really wants nothing to do with its larger neighbor. Our municipality of nearly 200,000 people has an ongoing problem with its budget and even gets chastised by the State Comptroller for being too optimistic with their projected revenues and not realistic enough about the cost of their appropriations. So does this mean that the Mayor and his administration don’t know how to run government, or are their other factors that we can point to as citizens? The small neighboring village I mentioned is the model for what has been happening for decades to the tax base of cities and is a hint to a larger looming challenge of technology on our economy. What our country has seen following post-war desegregation of housing and education and other civil rights victories, racial clashes and the conservative politicking against taxation generated a rapid exodus of higher-income white people from urban centers to suburban enclaves like the one walking distance from my home.  These suburbs slowly developed separate school districts and incorporated as separate towns, taking a significant tax base away from urban centers and contributing heavily to disinvestment famously from places like Detroit, Cleveland, and St. Louis but this has also been the case in our New York towns. Generally speaking the communities we live in survive by taxation revenues in the form of sales tax, real estate tax and fees for the use of city facilities. So woe to the city manager who has to decide how best to use the funds they have to make a community livable, with the best education for the children and free of pot holes, especially because their job is getting even harder with the onset of technology in major industries.

“Our technological powers increase, but the side effects and potential hazards also escalate”. Alvin Toffler

 

Technology and the Community

Imagine an opening ceremony for a new factory that has been automated for full efficiency and to minimize labor. The Mayor that is proudly cutting the ribbon should ask themselves, “will the robots be paying taxes?”.  This is not simply a modern Luddite position on technology rather a question of how we will be able to support our communities going forward.  Data on American labor over the last three decades has shown that there has been a steady rise in employee productivity but that wages have remained stagnant. The parallel to the shift of affluent citizens to suburban alcoves with manufacturing profits moving to shareholders is clear, off shore bank accounts are the new safe havens.  As workers are displaced in record numbers the most dramatic effect will be on services provided by our towns and unlike the challenges facing cities now, a technology revolution may be irreversible.

 

The table above is a 2013 snap shot of probabilities that your job will be displaced by technology in some way. I would like to add drivers (long haul, delivery, postal) to this list with a probability in the high ninety percentile with the onset of autonomous vehicles. In the graphic showing the most common profession by state (courtesy of NPR) what is illustrated clearly is how widespread the job displacement in the driver category would be;  every policy maker should be thinking of these drivers in terms of effect on their tax base. It will take a sustained effort to tell the stories of people displaced in the workplace by technology, Blue Collar Think Tank is a non-profit working to let these stories be heard and facilitate stakeholder meetings to create holistic strategies for the labor force.

www.bluecollarthinktank.com

@bcthinktank

Scott Dennis writes for the Blue Collar Think Tank.

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