Our Tax System is Why Robots Will Win the Job Market (if we let them)
Alex Carpenter
?=? CEO at Unlocking Technology | Transforming Businesses with AI | Strategic Leader in Entrepreneurship
In our quest for efficiency and cost-effectiveness, businesses are increasingly turning to automation (I see it everyday). But is our tax system inadvertently accelerating this trend, potentially at the expense of human workers?
The Tax Equation: Humans vs. Robots
Consider an Australian entrepreneur faced with a choice: hire 1,000 workers or deploy 1,000 robots.
1,000 Human Workers:
- Income tax withholding
- 11% superannuation contributions
- State-dependent payroll taxes
- Workers' compensation insurance premiums
1,000 Robots:
- Significant depreciation deductions
- Substantial R&D tax offsets
- Tax-deductible maintenance costs
The Bottom Line
Over a year, the financial implications are stark:
1,000 Human Workers:
Income tax withholding: AUD 18,000,000 remitted to ATO
Superannuation contributions: AUD 6,600,000
Payroll tax: AUD 3,000,000
Workers' compensation insurance: AUD 1,200,000
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Total tax-related costs: AUD 28,800,000
1,000 Robots:
Depreciation deductions: AUD 20,000,000
R&D tax offset: AUD 43,500,000
Tax-deductible maintenance costs: AUD 10,000,000
Total tax benefits: AUD 73,500,000
The difference is striking: While human workers result in AUD 28.8 million in tax-related costs, robots provide AUD 73.5 million in tax benefits - a net difference of AUD 102.3 million in favour of automation.
Unintended Consequences
Our current tax structure is unintentionally making it more financially attractive to replace human workers with automation. While technological advancement is crucial, we should try to rethink our tax system so we don't drive widespread job displacement.
A Call for Balance
We need tax reforms that:
1. Level the playing field between human and automated labor
2. Encourage innovation without penalizing human employment
3. Ensure the benefits of technological progress are shared equitably
It's time to reshape our tax policies to foster a future where technology and human workforce coexist harmoniously. Let's drive innovation while preserving meaningful employment opportunities for all.
#TaxReform #FutureOfWork #AI
Digital Marketer | Course Facilitator | Content Creator | Community Builder for Mission-Driven Organisations | Multipotentialite
7 个月Remember when people were screaming "AI will take our jobs?" Well yeah, when businesses are being incentivised in this way - of course they will.
I help emerging fashion brands scale | Fashion Manufacturing | Servant-leader
7 个月A bit of a more nuanced situation is that its becoming harder to hire folks who want to do the types of jobs that robts can fill. The case against robots presumes that there's this readily available and wiling workforce to do mundane jobs over a long period of time. Sure, some young folks don't mind doing it but they frequently show up and place the burden of training on the business. And after the business invests in this training the employee will do their term and then move on . Anecdotally, even here in China its becoming hard to hire qualified factory workers and we pay 60% over the livable wage. Younger generation folks would rather take less money to work in the gig economy because the thought of having to work on site in a regular cadence is totally not attractive to them at all.
Co-Founder & CEO desk.coach & Wini Health
7 个月I’d be very interested to see how countries like Denmark, Finland would deal with these issues.
?? Building better, safer cities with car data | Founder @ Compass IoT
7 个月We have pretty frequent water cooler conversations about how painful BAS and payroll tax gets once you start to hire consistently. I can understand why businesses that are struggling with cashflow would be considering hiring AI or robots over humans... do you think that's why so many startups exploit free interns for longer than they should?