BULAW5916 Taxation Law and Practice

Using several sources, identify and explain the arguments for and against the proposal to tax robots. Which arguments do you find most persuasive: The arguments for, or the arguments and against, and why.
Your response should include, but not be limited to, discussion of:
the meaning and purpose of taxation
what is meant by ‘smart autonomous robot’
possible impacts on the Australian tax base if there is an increased reliance on a smart autonomous robotic workforce and how to address these impacts
how a smart autonomous robotic workforce could be taxed –who would pay

Beta Pty Ltd – itself a large business – purchased a robotic machine from its parent company Alpha Pty Ltd for $500,000 on 1 January 2017. The market value on that date was $300,000. Alpha Pty Ltd owned the machine for 3 years and used the prime cost method when calculating its depreciation deductions. The robotic machine has an effective life of 8 years.

 

What is the decline in value of the robotic machine for Beta Pty Ltd this income year Provide calculation and reasons for your answer.

It is said by Bill gates that the robot who takes up the job and does the job like human employees should pay taxes

The impression of a tax on automatons was elevated last May in a draft report to the European parliament ready by MEP Mandy Devalue from the collection on legal substances

it’s a conspicuous situation from the world’s unlikeliest richest man and a self-described techno-optimist who co-founded Microsoft, one of the foremost companies in artificial-intelligence knowledge. It is being says that the robots will be replacing the humans in the next 20 years. He trusts that the businesses using AI and automation to upsurge automation should face advanced taxes, in command to reduce financial dissimilarity and alleviate the depression that prevalent dismissals would have on community money. 

Taxing automatons would, in reality, be a duty on the capital that is in the business or employed by the business helps in using them and might help to compensation the lasting shift away from demanding capital It is being said that robot can just be said as a smartphone or a vehicle and imposing tax on them will need lot more of clarity. In realism, mechanization will branch the development of many fresh works, counting some completely new job groups.” In the United Kingdom, London is the city at lowermost risk of trailing jobs to automation, at 39 per cent; the wealth and its nearby parts presently are profited from lesser joblessness rates than the rest of Britain whereas Ireland is just the opposable of losing more jobs. It is said that Receiving corporations to pay their amount of tax will not resolve the larger social test that automation will ultimately relocate low-skilled workforces, nor would a taxing a robot. Administrations have full time invested on using business tax incomes to create free or low-cost schooling packages to prepare persons to work together with automation (Smith, 2017)

. A robot is a wealth venture, like a blast furnace or a processer. Economists generally give suggestion that such things should not be taxed, which tends an economy or business to produce more. All duties, except a “lump-sum duty”, present misrepresentations in the family. But no administration can execute a lump-sum tax – the same amount for everyone regardless of their income or expenditures – since it would fall most deeply on those with less revenue, and it would chore the poor people, as they won’t be able to pay the taxes. So duties have to be connected to some action revealing of aptitude to pay duties, and whatever action it is will be disheartened as a result Assessment that discourages speculation is supposed to make individuals shoddier without levitation much money (Hamel, 2017). But in this case Bill gates has in his mind that investing in robots is just a case of investing in a new generator because it tends to boost economic output to a larger extent and also it executes a social cost.  

Maybe fast mechanization looms to remove workforces from old jobs earlier than new subdivisions can fascinate them. A tax on automatons that abridged those prices can be worth a decision of implementing, just as a tax on damaging blast-furnace productions can dishearten contamination and leave civilization better off. It is to be though off that having an investment in robots will actually make humanoid workers more creative rather than disposable, when the robots are taxed it would actually leave the humans in  a worse condition, they would actually being depression that the robots have replaces them. A robot is a wealth venture, like a blast furnace or a processer. Economists generally give suggestion that such things should not be taxed, which tends an economy or business to produce more Decelerating the placement of robots in fitness care and driving persons into such occupations can maintain a good community stability. It also indicates that health-care costs grow fast, guzzling up the improvements in workers’ profits, then the triumph is Pyrrhic.. Some famous personality accomplishes that, though the share of revenue curving to workforces has weakened in current decades, the part flowing to money which includes the automation robots have contracted faster . (Business insider, 2017)

Taxing automatons would, in reality, be a duty on the capital that is in the business or employed by the business helps in using them and might help to compensation the lasting shift away from demanding capital. In 1981, the rate of company tax was 52%, although substantial relief meant that the tax base was comparatively slim. This has now dropped to 20% and further discounts to 17% are which is determined by 2020.

In a machinelike surgery advance, a bot sewed up a pig’s minor by its own sense of seeing, gears, and intellect to transmit out the process.

What’s more, the Smart Tissue Autonomous Robot (STAR) did a very good performance on the process than humanoid surgeons who were provided with the same job. STAR’s discoverers don’t entitle that humans can be replaced by robots in the functioning room in near future . Taxing speculation on mechanization gear would cut the predictable return on asset or the ROI for original schemes that use these skills. Businesses should be invigorated to capitalize in groundbreaking knowledge rather than disheartened by the taxation on robots.

They see the achievement as a resistant of concept—both for the exact skills used and for the over-all notion of “administered independence” in the era. Robot taxation can be a great help to counter tax evasion, as the tax would be derived  by taxing a theoretical income paid to the robot, and the corporation would be permitted to remove this hypothetical sum for the purpose of company tax. According to referring  in principle, 50% of present Swiss jobs could certainly be lost to mechanization in the pending years. But actual service figures show that over the last quarter period, there have been creation of more jobs shaped due to mechanization than have been lost (Karsten, 2017)

In the same moment, jobs with minimal risk of being substituted by mechanization have grown meaningfully, and vice versa, or even decreased. Jobs with a little risk of auxiliary by machines tend to include originality, communal communication and client service. Could assessment or taxation  of machines or automation can ever happen? Surely it can, but the $64,000 query is that whether  there is the party-political will to do it. It would take a major example alteration in our attitude towards assessment to see it as a conceivable force for moral, somewhat than just a dead heaviness and load. Bill Gates also quoted that the taxation of robots will actually not discourage innovation, individuals are therefore more curious about the effect of such technology but assessment or imposing taxes is an improved way of alleviating these doubts than the alternate of outlawing characteristics of it (Ellis, 2017)

If seen against the statement taxing a robot is not a good decision, as bill gates focused on musing government saying that the administration should be considering taxes on robots. It is an fascinating if unviable and unpractical thought, which discloses a lot about the challenge of mechanization

 Though, in the 1960s and 1970s today's boldness towards assessment would have been equally unthinkable.  Never have a negative attitude and things will be in place.

Specialists distress on the size of the influence that mechanisation know-hows will have on the staff.  While some caution of astounding joblessness, others point out that knowledge may make new occupation groups that will service banished labours. Other party maintains that the workstations will have no effect on employment in the near future. Almost applying a robot tax would be tremendously problematic and anxious with influences over what defines a robot.

Flipchart , for sample, has huge savings and investments in robotics, machine apparition, and granary automation to recover the spending knowledge for millions of customers.

Taxing speculation on mechanization gear would cut the predictable return on asset or the ROI for original schemes that use these skills. Businesses should be invigorated to capitalize in groundbreaking knowledge rather than disheartened by the taxation on robots. Taxation competence , proficiency, productivity is a wrong way These levies would probably lead to abridged financial development and would damage the aptitude of U.S. businesses to contend in global marketplaces. It is convinced that some of the employment will be expatriate by developing know-hows, but the development or progress should not be something that should be feared on. Policies that discourse disturbances to service and community dissimilarity is very much necessary. Lately, a spate of levels have seemed in the television gambling that advances in knowledge, exactly automation and false acumen, will unavoidably lead to extensive job fatalities as labors are replaced by machines. Automation can be unstated as the emergency of labor with capital. To save beings from pennilessness, the cognitive goes, a share of the economy’s wealth income needs to be distributed to the workers. Increasing capital possession is one plan; persons could own driverless means of transportation that operate as taxis, for example, and rely on the flow of fares for part of their income. Demanding taxes on robots and reallocating the profits is another (Shiller, 2017)

• On the other hand there are pros of replacing the humans with the robots as the experts system preserves knowledge that might be lost through death retirement of human employees
• Experts system are not subjected to any human feelings
• Experts systems assist novices in thinking the way experienced professionals do
• They are highly developed decision support system and helps in marketing manufacturing another business related problems.

Finally, Bill Gates puts onward the now out-of-date view that managements have an significant role to play in battling dissimilarity. For the past 35 or 40 years the leading opinion has been that this would be attained through financial development and would consequently be left to the secluded subdivision and the marketplaces. But Gates says that battling disparity will necessitate large quantities of additional labour to be second-hand to assistance those on subordinate incomes, that automatons will allowed up this labour and that the motivation for the needed vicissitudes must come from administrations since business cannot do this with their own harmony. He also quoted that the taxation of robots will actually not discourage innovation, individuals are therefore more curious about the effect of such technology but assessment or imposing taxes is an improved way of alleviating these doubts than the alternate of outlawing characteristics of it.

Could assessment or taxation  of machines or automation can ever happen? Surely it can, but the $64,000 query is that whether  there is the party-political will to do it. It would take a major example alteration in our attitude towards assessment to see it as a conceivable force for moral, somewhat than just a dead heaviness and load. Though, in the 1960s and 1970s today's boldness towards assessment would have been equally unthinkable.  Never have a negative attitude and things will be in place. A reasonable tax on automatons, even a provisional tax that just slows the acceptance of troublesome knowledge, seems a normal constituent of a rule to talk  about mounting disparity.

Beta Pty Lilted is a large business who has purchased a robotic machine which is actually operated by humans  from the parent company Alpha Pty Ltd for $500,000 on 1 January 2017. We see that the market value of that was prevailing $300000. For further information we see that the machine  was owned by Alpha for 3 years and he used the Prime cost of method or the straight line of method to  calculate depreciation. The useful life of the robot is estimated to be 8 years.

Depreciable assets are commercial assets which can be depreciated over time

We can depreciate buildings ,furnitures and fixtures, equipment etc.

Land, current assests Cash cannot be depreciated

Usually we calculate prime depreciation cost is calculated by the cost of the asset minus any scrap value divide by number of years,The Internal Revenue Service (IRS) allows industries to subtract the cost of certain assets bought for business commitments on their revenue tax returns. It is seen that the prime cost is easier than the diminishing method as the rate of depreciation will be the same and it is easier to calculate depreciation. From a tax perspective, it may be beneficial for a corporate to use the diminishing balance method since it can allow the corporate to take superior tax assumptions during the years it is put to use , that is the first years of the asset introduction

Businesses or corporation can conduct various methods or depreciation such as WDV method, sum of digits methods or prime cost method. The Internal Revenue Service (IRS) allows industries to subtract the cost of certain assets bought for business commitments on their revenue tax returns From a tax perspective, it may be beneficial for a corporate to use the diminishing balance method since it can allow the corporate to take superior tax assumptions during the years it is put to use , that is the first years of the asset introduction.

Businesses often purchase equipment such as motor cars or equipment in order to conduct business. Assests lose value that is they depreciate over time and that is very common. The prime cost technique, also called the straight-line method, undertakes that the worth of an asset reduces at a unchanging rate over time. For example, if a trade owner buys a piece of asset for $6,000 that has a valuable life of six years, the price of the asset would drop down by $1,000 a year under this method.. It is little different from the diminishing procedure of depreciation which says the cost of an asset depreciated more in the starting than in subsequent years,.

Beta Limited purchased for  $ 500000 when the market value was $300000 , so we can say then the decline in value is $ 200000. For the income year depreciation will be calculated on $500000 that is $100000 every year according to the straight line method of depreciation. So $ 100000 will be charged a depreciation , therefore the total decline in value will be  $ 300000 (Hamel, 2017).The tax payer can claim capital allowance progressively on cost of the depreciable asset. 

References 

Hamel, G (2017).Prime cost depreciation method. [online] Available at: http://smallbusiness.chron.com/prime-cost-depreciation-method-32558.html [Accessed  9^th April. 2017].

Senthalligam , M (2017).Robot perform surgery [online] Available at: http://edition.cnn.com/2016/05/12/health/robot-surgeon-bowel-operation/ [Accessed  9^th April. 2017].

The economist  (2017).Taxing robots not a good idea [online] Available at: http://www.economist.com/news/finance-and-economics/21717374-bill-gatess-proposal-revealing-about-challenge-automation-poses-why-taxing [Accessed  9^th April. 2017].

Smith ,S (2017).Bill gates robot tax. [online] Available at: http://thehill.com/blogs/pundits-blog/economy-budget/323266-bill-gates-robot-tax-idea-is-flawed-heres-why [Accessed  9^th April. 2017].

Ellis ,P (2017).Tech and innovation. [online] Available at: http://www.ogilvy.com/topics/tech-innovation/arguments-for-and-against-the-robot-tax/ [Accessed  9^th April. 2017].

Business Insider(2017).Bill gates plan to tax robots. [online] Available at: http://www.businessinsider.com/bill-gates-robot-tax-brighter-future-2017-3?IR=T [Accessed  9^th April. 2017].

Ellis ,P (2017).Tech and innovation. [online] Available at: http://www.ogilvy.com/topics/tech-innovation/arguments-for-and-against-the-robot-tax/ [Accessed  9^th April. 2017]. 

Shiller ,R(2017).Why robots should be taxed [online] Available at: https://www.theguardian.com/business/2017/mar/22/robots-tax-bill-gates-income-inequality [Accessed  9^th April. 2017].

Luterbatcher, C (2017).Should robots be taxed for stealing jobs. [online] Available at: https://www.swissinfo.ch/eng/business/automated-workforce_tax-robots-for-stealing-jobs-/42976564 [Accessed  9^th April. 2017].

Karsten, J (2017).Robots intelligence. [online] Available at: https://www.brookings.edu/blog/techtank/2015/10/26/how-robots-artificial-intelligence-and-machine-learning-will-affect-employment-and-public-policy/ [Accessed  9^th April. 2017].

Varao fakis, Y (2017).Tax on robots. [online] Available at: https://www.project-syndicate.org/commentary/bill-gates-tax-on-robots-by-yanis-varoufakis-2017-02resources/f8/technical-articles/the-control-environment-of-a-company.html [Accessed  9^th April. 2017].