Australian (ASX) Stock Market Forum

Robotax

Craton

Mostly passive, contrarian.
Joined
6 February 2013
Posts
1,862
Reactions
2,819
Although not a new concept, Robotax as per the title, I've not found a relevant thread in ASF re. automation/robotics/AI et al replacing the tax paying workforce. Thus, how will our govt. or any govt. for that matter, replace that lost income tax revenue.

No doubt govts. will need to keep receiving and indeed raising tax revenue to keep funding the ever increasing spend on defence, infrastucture, social security, health, education etc.

Alan Kohler has an interesting take on the superannuation wealth tax on balances above $3mill. As he suggests, the lost worker income tax revenue due AI et al has to be made up from somwhere.


From Wikipedia and reads in part:
A robot tax is a legislative strategy to disincentivize the replacement of workers by machines and bolster the social safety net for those who are displaced. While the automation of manual labour has been contemplated since before the Industrial Revolution, the issue has received increased discussion in the 21st century due to newer developments such as machine learning.[1]

Assessments of the risk vary widely, with one study finding that 47% of the workforce is automatable in the United States, and another study finding that this figure is 9% across 21 OECD countries.[2][3] The idea of taxing companies for deploying robots is controversial with opponents arguing that such measures will stifle innovation and impede the economic growth that technology has consistently brought in the past. Proponents have pointed to the phenomenon of "income polarization" which threatens the jobs of low-income workers who lack the means to enter the knowledge-based fields in high demand.
[4]
A worriesome dilemna that has seen some govts. cut autmation subsidies to companies e.g., Sth Korea.

Also as per the above Wikipedia page:

On August 6, 2017, South Korea, under President Moon, passed what has been called the first robot tax. Rather than taxing entities directly, the law reduces tax breaks that were previously awarded to investments into robotics.

As they say, the world progresses but two things remain certain, death and taxes...
 
I wondered why Sth Korea moved to cut incentives.

21 May 2025 from PatentPC, quick synopsis of countries with the highest robot density per 10,000 employees/workers.

Ah huh, all makes sense now and reads in part:

1. South Korea has the highest robot density in manufacturing with 1,000 robots per 10,000 workers​

South Korea is leading the world in robot adoption in factories. With 1,000 robots per 10,000 workers, the country is not just ahead—it’s in a different league. This kind of robot density means one in every ten workers is matched with a robot.

What does this mean in real terms?

It means South Korean companies can make products faster, more accurately, and at lower cost. Their factories are cleaner, safer, and more efficient.

Workers are also trained to handle high-tech tools instead of performing repetitive tasks. Many companies in South Korea have moved beyond simple assembly lines and into smart factories, where machines talk to each other and self-monitor for errors

Note that figure is up from 932 in 2021.

1. South Korea​


Industrial robots per 10K employees: 932

It’s no surprise South Korea leads the world in robot density. South Korea’s robot density is seven times higher than the global average, and the country has been increasing its robot density by 10% every year since 2015.

South Korea has a strong foothold in two key areas for industrial robotics: electronics and automotives. While South Korea was second on the 2019 list, it had previously held the top spot since 2010.

So it stands to reason that in 2017 Sth Korea foresaw the need to cut automation incentives.

Of course this lead me down the path of Sth Korea tax rates and note that the rates quoted are the top tier personal tax rates, but personal income tax rate started rising in 2017 and from 2022 has been 45% with the average at 39.18%.

Company tax is 24%.

Thus a declining population albeit a slight uptick in recent years and automation cutting into the tax coffers, what appears to be the main game and I' d suggest that is the case with vitually all govts, that is raising personal taxes.

E.g., Japan is 3rd on the automation list with 390 robot density per 10,000 workers but we all know, Japan's population is falling fast and hence, yep you guessed it. The opposite is true for personal income tax.
Coming in at an eye watering 55.95% and being so since 2018.

Corporate tax rate is 30.62%

Of the top five countries comparing robots per workers and in order, Sth Korea, Singapore, Japan, Germany and China, all have a personal tax rate of 45% or higher with Singapore the standout with a much lower rate of only 24%.

I note Japan produces over 45% of all industrial robots. Apparently renowned for precision, durability, and reliability. Plus documentation, training and service support is top notch.

China is the fastest adopter of automation.

So the question arises; with the individual paying more in taxes, a trend that is increasing, what impact has automation had on Australian tax revenue?
 


Write your reply...
Top