Yesterday I read an article in Austrian paper called “Der Standard”. Unfortunately I forgot (or better said, didn’t make a note of) the author, but the topic was quite interesting, worth sharing. It was about taxes.
Author said that at least in Austria, 2/3 of tax income comes from employee related taxes. Those are taxes on your salary, and the costs of employment carried by the employer. Further, author stipulates that because of it, the whole system may soon crash. And I agree.
First reason for that is number of workers – that goes down. All over. Second is that societies are getting older, and we need more if we are to respect our social obligations (even if only in form of retirement funds). Socially oriented countries, such as Austria, have a major problem with it which they try to fix with ever growing retirement age and some such not really popular moves. Will this help? I don’t think so.
One of the major issues is automation. Live people are being replaced by robots of one form or the other, from automated order screens at McDonalds, to actual robots at the factory floor. Those guys don’t pay taxes and humans which have been replaced don’t pay anything either. Quite the opposite, now we (the guys which still have some job) have to cover them too.
Is there a solution? Author proposed a bigger consumer tax, such as VAT. I disagree – in order to consume, you have to work too. If there is lees people with disposable income, plus greater poverty in society, raising VAT will not help, it may have opposite effect. Thisgs will get too expensive to buy. And if we will not buy, there will be no tax income.
Do I have a solution? Yes, although you will think that this is an idea to stop technological growth. It isn’t, although I admit that it may slow it down a bit (what on its own in some cases may be a good idea). My idea is to treat robots at factory floor as humans. Since humans working there did get paid and paid taxes on their salaries, make them pay taxes on same salaries (which they obviously don’t get) too. That way those “guys” would support country coffers. Of course those taxes would come from the factories paying for those robots. The thing is though, they win anyway by not having to pay salaries anymore. The only thing that happens is longer ROI. Not much else – well, maybe except the fact that some robots would no longer be financially valid and humans would stay. That is (at least in interim) not so bad, is it? At least until someone would come up with an idea what to do with all those people which lost their jobs to robots or automation.