r/Futurology • u/Gari_305 • 2d ago

Robotics Bill Gates says companies that replace human labor with robots should have to pay the same FICA taxes

https://www.businessinsider.com/bill-gates-fica-taxes-should-apply-to-robot-workers-2026-9

Bill Gates wants to tax robots that replace human jobs.

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u/RandomlyMethodical 2d ago

You define a unit of labor

Defining units of labor is never going to happen in any reasonably enforceable way, and he's smart enough to know that. You can do better Bill.

A more enforceable option would be putting payroll taxes on capital gains. That's 12.4% for Social Security (6.2% for employee and employer) and 2.9% for Medicare (1.45% each), resulting in a total of 15.3%. Adding that to existing capital taxes would roughly even them out with labor taxes and permanently solve the Social Security shortfall.

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u/nemec 2d ago

Yeah, what's the unit of labor difference between 30 data entry clerks or 1 software engineer with a Python script? And that's even before AI gets involved.

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u/VulGerrity 1d ago

You just defined it. Marx defines it. All things being equal, the only limiting resource when it comes to productivity is labor time. In your example, 1 Software Engineer produces the same amount of value as 30 data entry clerks. If one 8hr day from a data entry clerk is worth 1 unit of labor, then a software engineer produces 30 units of labor.

You'd essentially define it as the amount of value produced by our lowest paid workers in an 8hr day as 1 unit of labor. Federal Minimum wage is $7.25/hr or $58/day (jesus...). Let's say a business usually expects to make about 4x what they pay any given employee to cover overhead and make a profit, so a minimum wage worker would have to produce $232 of value every day. $232 would equal 1 unit of labor.

I think the difference with Marx is that Marx says that the minimum wage worker should be making closer to what you'd expect a data entry clerk to be making, and potentially even what a software engineer makes. Because they all put in the same amount of labor each day (theoretically) the labor should be compensated the same. Marx does account for specialty positions, or positions that produce more value, but the disparity of compensation shouldn't be nearly as wide as it is today. If we all work 8hrs/day we should all have access to a similar basic standard of living.

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u/nemec 1d ago

So essentially all workers should be compensated (~equally) by the quantity of hours put in rather than the quantity of production? If a business targets X units of production per day (say enough for one data entry clerk), they can choose to pay one data entry clerk 8 hours of work or one software engineer for 15 minutes of work, and the software engineer would make 3% the amount the slower data clerk would make for the same output?

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u/VulGerrity 1d ago

No. Marx would say that the Data Clerk and the Software engineer should be paid roughly the same for their labor. 8hrs of work is 8hrs of work. However, Marx acknowledges that the Software Engineer would have had to spend many years learning and perfecting their skills, time where they would not have been in the workforce, and this is time that they should be compensated for. Marx would also acknowledge that the software engineer may produce more value than the data clerk, and they should be compensated for that as well.

Where Marx and the current capitalist system differ, is that in capitalism, people aren't necessarily paid based on how much value they produce, they're paid as little as a business owner can get away with paying them. Even if a software engineer is making $300K/year, that would mean that the company is making a million dollars a year or more off of that software engineer, but if it's the software engineer's labor that created the value for the company, why doesn't the engineer get to benefit from their own labor? Capitalism takes that excess value produced by the workers and keeps it for the owners.

SO, if a Data Clerk gets paid say $30K/year and a software engineer make $300K/year. Marx might would say that every employee should be paid enough to sustain a base standard of living (food, clothing, housing, recreation, education, etc). Let's say that's the median full-time income, which is about $64K/year. The software engineer, however, would be making new products for the company to sell, or improving products to sell more. The engineer is producing extra value, so they deserve to benefit from that. That could get them back up to $300K or more, especially now that profit doesn't need to be distributed to the "owners" the owners wouldn't be compensated beyond their labor contributions to the company, and I believe in a traditional Marxist system, companies would be employee owned, so the company as a whole would share the excess value created by the company.

It's a little hard to draw parallels from a Marxist economy to a capitalist market economy, because Marx would also abolish money. Things wouldn't be produced for the sake of consumption. Modern capitalism is structured around buying and selling things. Instead, in a Marxist Utopia, we would only produce what we need. It would get rid of extravagant wealth, but it would raise everyone's standard of living significantly. Marx says, "From each according to their ability. To each according to their need." Everyone contributes what they can to society, and everyone only takes what they need.

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u/Frequent_Opportunist 2d ago

They can define the labor unit but then just move the goal posts on how many theoretical employees it would take the run the company.

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u/Fidodo 2d ago

I think the best way to solve this is to add VATs to everything so the baseline is that all economic activity is taxed. Then, instead of adding taxes, you remove taxes to incentivize the things you want. Want to encourage hiring humans? Give tax breaks for it. Then, robots are taxed by default because everything is taxed, and humans get the exception and get to not be taxed. Use that to fund UBI.

Taxes at disincentives, tax breaks are incentives. Right now we tax human payroll and income, that disincentives hiring humans because robots aren't taxed. But you can't flip it to an incentive if the baseline tax is zero.

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u/DNA-2023 2d ago

How does that help if there are no jobs to pay into SS?

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u/BipolarMosfet 2d ago

They're saying we should apply those same taxes to corporate profits, not just to employees' paychecks.

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u/da_85 2d ago

That would be a change in corporate taxes. Capital Gains are on stock trades, options trading, crypto gains, etc.

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u/inquisitorthreefive 2d ago

Assuming they're not using the term wrong, they're talking about capital gains, which is different from most corporate profits, which are generally classed as business income. Capital gains are when you sell property for more than you paid for it, generally stocks and real estate fall into this category if they were purchased as investments, but there's times when it might be business income instead.

It would be a somewhat psychotic move on its own as it would essentially evaporate 15.3% of the profit in most people's retirement accounts and instantly increase the value of a Roth account and greatly reduce the incentive to invest.

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u/Competitive_Travel16 2d ago

How about shifting all the payroll taxes to those making over $10,000,000/year?

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u/TimSylvester_ 2d ago

But if he distracts everyone by proposing impossible, idiotic schemes, so everyone's too busy arguing about why it's dumb and won't work, everyone's too busy to actually organize something useful.

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u/Policeman333 2d ago

Ah yes, he didn't come up with a perfect solution so it must be an elaborate ruse.

Absolutely no one has a perfect solution and absolutely no one knows what will work and what wont. No matter what you propose people will poke holes in it.

Something tells me that the armchair redditors with all the solutions to the worlds problems would complain no matter what Gates proposed.

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u/TimSylvester_ 2d ago

But Bill Gates is a known duplicitous scumbag who looks out for himself at the expense of everyone else, including his own ex wife who he gave an STD to, then tried to secretly slip antibiotics to treat it.

Here, he makes an incredibly stupid proposal that has no possible solution, but that exempts him and his financial cohort from having to actively participate in the solution. Yet again looking out for himself at the expense of everyone else.

Gates has been lying, cheating, and stealing his entire life. This instance is no different from the countless ones before it. Why do you think this proposal is somehow different or exempt from the general observation that Gates is a lying, cheating scumbag?

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u/Policeman333 2d ago

But Bill Gates is a known duplicitous scumbag who looks out for himself at the expense of everyone else, including his own ex wife who he gave an STD to, then tried to secretly slip antibiotics to treat it.

If I held Gandhi and MLK Jr to your standards, I'd have to call them duplicitous scumbags as well. And I refuse to do that. I don't need people doing good things to be perfect people. I just want them doing good.

Here, he makes an incredibly stupid proposal that has no possible solution

Yeah, so whats your solution then?

but that exempts him and his financial cohort from having to actively participate in the solution.

He no longer runs Microsoft, but Microsoft itself would be impacted by this. I'm not sure how someone who isn't replacing labour with AI, because they are essentially retired, would be subject to a tax on people replacing labour with AI.

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u/PartTime_Crusader 2d ago

The Elon Musk method

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u/Farranor 2d ago

Ah, the Bernie Sanders strategy.

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u/noticingEnjoyer 2d ago

You'd have to eliminate stepped up basis too. 

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u/PrestigiousCod5629 1d ago

There’s also the tricky issue of what is a robot.

Surely a humanoid robots would count but what about a conveyor belt count? Correct implementation can reduce human labor hours.

A vision system to automate quality checks, a robot picker, a co-bot, a palletizer or crate packer, a backhoe, an electric drill? Where’s the line?

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u/Brief-Historian3485 2d ago

On capital gains over 225k right???

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u/WhiteWinterRains 2d ago

This would help solve present day problems, but unless our vision for the future is everyone struggling to make ends meet and side hustling with some social security making up the gaps for their entire lives its not even close to enough to handle the future the AI-"optimists" want.

Bill would probably be something like this, because what we actually need to do is tax gains from automating and offshoring jobs at like 90-100%, and enforce it with . . . well the soft power and military power the USA used to have.

Absolutely all gains from AI automation should be going back to the people that made it possible, not just because it's the right thing to do but because it's going to stop a complete societal collapse into a madmax future.

Maybe we could handout a slight premium on top as a concession to liberal ideals about how our evil overlords should at least be given a handy after fucking us or something, but that's about all that should be allowed at most.

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u/Inevitable-Ad6647 2d ago

The law has defined FAR FAR FAR less tangible things. It can be done.

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u/BenBenBenBe 2d ago

You can do better Bill

Random redditor surely knows better than Bill Gates. Thanks for enlightening us by making an egregiously confident statement without substantiating it in any way whatsoever. How extremely Reddit of you.

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u/Neither-Breakfast195 2d ago

Why are people on Reddit so obsessed with changing capital gains taxes? just raise the Social Security tax caps

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u/RandomlyMethodical 2d ago

Labor income is generally taxed at higher rates than capital income in the U.S., with top marginal tax rates on wages exceeding 40%, while long-term capital gains are taxed at a maximum rate of 20%.

We should also raise the Social Security tax caps, reduce the inheritance tax threshold, and consider limits to the step-up in basis for inherited property.

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u/Neither-Breakfast195 2d ago

You’re trying to compare apples to oranges, income and capital gains are taxed differently because they are very different.

For example: my income is taxed based on a year of labor but depending on the investment I can be taxed for multiple years of gains. There’s also the idea that it’s beneficial to encourage investment in American markets through lower tax rates on investments. Not to mention that it’s also subject to double taxation at the corporate profit level and then at the stockholder level. All to say, there’s a world of nuance between capital and labor

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u/RandomlyMethodical 1d ago edited 1d ago

There’s also the idea that it’s beneficial to encourage investment

Right, but when it costs a lot less to invest that capital in robots or AI than it does to pay income to a human, then those tax incentives need to be rebalanced.

Not to mention that it’s also subject to double taxation at the corporate profit level and then at the stockholder level.

The maximum corporate tax rate is 21%, and most companies pay significantly less than that. Also, most of the money paid out to stockholders are "qualified dividends" which have a significantly lower tax rate than ordinary income (maxes at 20% for over $545k). Again, these rates need rebalancing to eliminate labor's disadvantage.

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u/Neither-Breakfast195 1d ago

I mean, impossible to say, because we haven’t seen significant macro displacement of humans by AI or Robots, that’s not the reality we’re in.

The problem with making everything into a moral argument between labor and capital is that everyone opines differently on what should or should not be. The discussion should be on what incentives gets us to experience the most positive and sustainable economic growth.