GOP Tax Plan Incentivizes Companies To Use Robots Versus Human Labor

U.S. Military / Public Domain

The GOP tax plan focuses more on expanding incentives for buying robots than it does hiring or training humans.

Critics of the Republican tax plan, called the Tax Cut and Jobs Act, say a better name for the law might be the "Tax Cut and Robots Act." Why? Because the bill lacks specific tax breaks that might promote job creation, but it does include an expansion of incentives for companies to purchase robots that would replace human employees.

Republicans say that lowering taxes will boost the economy and spur job creation. But critics say that the tax legislation would create an imbalance favoring machines over workers.

MIT economist Daron Acemoglu said automation is a good thing, because it increases productivity and helps keep the U.S. economically competitive.

But, he says, "the problem is when you subsidize heavily the adoption of machines instead of people." Then you're putting your thumb on the scale against workers, Acemoglu says.

When companies do not have a meaningful cost benefit to purchasing machines rather than employing people, they are likely to continue hiring instead of buying.

But Acemoglu says even the current law favors machines, and the Republican tax bills tip the scales even more. So if you buy the machine, you'll get "a huge handout from the government," he says.

"To balance the scales it would be good to encourage firms to invest in their workers," Acemoglu says. Germany "has invested much more in robots than we have," he says. But it's done it in a way "that still has kept employment growing in the manufacturing sector."

Comments (2)
No. 1-2




It says NPR above and the link is cited.