Should Robots Be Taxed? | Zendy

João Guerreiro | Zendy; Sérgio Rebelo | Zendy; Pedro Teles | Zendy

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Should Robots Be Taxed?

Author(s) -

João Guerreiro,

Sérgio Rebelo,

Pedro Teles

Publication year - 2021

Publication title -

the review of economic studies

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 15.641

H-Index - 141

eISSN - 1467-937X

pISSN - 0034-6527

DOI - 10.1093/restud/rdab019

Subject(s) - economics , robot , automation , optimal tax , inequality , microeconomics , labour economics , computer science , engineering , artificial intelligence , mathematics , mechanical engineering , mathematical analysis

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.

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