Should robots be taxed?

João Guerreiro; Sérgio Rebelo; Pedro Teles

doi:10.1093/restud/rdab019

Should robots be taxed?

João Guerreiro, Sérgio Rebelo^*, Pedro Teles

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

40 Citations (Scopus)

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Abstract

Using a quantitative model that features technical progress in automation and endogenous skill choice, we show that, given the current U.S. tax system, a sustained fall in automation costs can lead to a massive rise in income inequality. We characterize the optimal tax system in this model. We find that it is optimal to tax robots while the current generations of routine workers, who can no longer move to non-routine occupations, are active in the labour force. Once these workers retire, optimal robot taxes are zero.

Original language	English
Pages (from-to)	279–311
Number of pages	33
Journal	Review of Economic Studies
Volume	89
Issue number	1
DOIs	https://doi.org/10.1093/restud/rdab019
Publication status	Published - 1 Jan 2022

Keywords

Inequality
Optimal taxation
Automation
Robots

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

Access to Document

10.1093/restud/rdab019

38241346Accepted author manuscript, 793 KBLicence: Unspecified

http://hdl.handle.net/10400.14/36577Licence: Unspecified

Cite this

@article{4d66bca0ba154d609938247086de35d6,

title = "Should robots be taxed?",

abstract = "Using a quantitative model that features technical progress in automation and endogenous skill choice, we show that, given the current U.S. tax system, a sustained fall in automation costs can lead to a massive rise in income inequality. We characterize the optimal tax system in this model. We find that it is optimal to tax robots while the current generations of routine workers, who can no longer move to non-routine occupations, are active in the labour force. Once these workers retire, optimal robot taxes are zero.",

keywords = "Inequality, Optimal taxation, Automation, Robots",

author = "Jo{\~a}o Guerreiro and S{\'e}rgio Rebelo and Pedro Teles",

note = "Funding Information: We thank Bence Bard{\'o}czy, Gadi Barlevy, V.V. Chari, Bas Jacobs, and Nir Jaimovich, as well as Veronica Guerrieri and three anonymous referees for their comments.We thank Miguel Santana for excellent research assistance. Teles is thankful for the support of the FCT as well as the ADEMU project, {"}A Dynamic Economic and Monetary Union,{"} funded by the European Union's Horizon 2020 Program under grant agreement 649396. Publisher Copyright: {\textcopyright} 2021 The Author(s). Published by Oxford University Press on behalf of The Review of Economic Studies Limited.",

year = "2022",

month = jan,

day = "1",

doi = "10.1093/restud/rdab019",

language = "English",

volume = "89",

pages = "279–311",

journal = "Review of Economic Studies",

issn = "0034-6527",