I have never been impressed with the casual economic arguments that Bill Gates has made in the past. He seemed to have a poor surface understanding economics but in the past I put him on a level similar to Donald Trump. That's not good.
But comments Gates made on Friday drop him to an entire new lower level of cluelessness in my ranking of public economic ignoramuses.
Gates, the co-founder of Microsoft and world’s richest man, said in an interview Friday that robots "that steal human jobs" should pay their fair share of taxes, reports the New York Post.
“Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, Social Security tax, all those things,” he said. “If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.”
Gates made the remark during an interview with Quartz.
“Exactly how you’d do it, measure it, you know, it’s interesting for people to start talking about now,” Gates said. “Some of it can come on the profits that are generated by the labor-saving efficiency there. Some of it can come directly in some type of robot tax. I don’t think the robot companies are going to be outraged that there might be a tax. It’s OK.”
How idiotic can you get? A robot is just another form of capital. Capital never "gets paid." Money, generated by capital, flows to capital owners who do pay taxes! All money ends up with some human somewhere. How clueless is Gates?
Maybe we should retroactively tax all Microsoft software for all the jobs it "ended." In the words of Gates, I don't think he is "going to be outraged that there might be a tax. It’s OK."
The fact of the matter is that capital, be it software, robots or some other form, increases productivity. This does not wipe jobs off the planet. It causes people to move into other jobs. This is economics 101. Markets clear, including labor markets. If people lose jobs because of more productive capital and they have to move to other jobs, it means the pool of product is greater. This is a net gain for an economy and the more it happens the greater the gain for everyone in the economy.
You really have to be an idiot to want to tax the owners of capital that are responsible for these gains in product.