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- Title
Optimal Taxation of Robots.
- Authors
Thuemmel, Uwe
- Abstract
I study the optimal taxation of robots, other capital, and labor income. I show that it is optimal to distort robot adoption. The robot tax (or subsidy) exploits general-equilibrium effects to compress wages, which reduces income-tax distortions of labor supply, thereby raising welfare. In the calibrated model, when robots are expensive, a robot subsidy is optimal. As robots get cheaper, it becomes optimal to tax them. Yet, when reforming the status-quo tax system, most welfare gains can be achieved by adjusting the income tax. The additional gains from taxing robots differently from other equipment capital are close to zero.
- Subjects
OPTIMAL taxation; INCOME tax; ROBOTS; ROBOT industry; LABOR supply; TAX reform
- Publication
Journal of the European Economic Association, 2023, Vol 21, Issue 3, p1154
- ISSN
1542-4766
- Publication type
Article
- DOI
10.1093/jeea/jvac062