As the idea of a robot tax gains interest, Indonesia has a narrow pro-labor tax that is actually in effect.
Tobacco is a huge killer in Indonesia, and the government there struggles to tax it. But it’s also a huge employer, so taxing tobacco nudges against jobs.
So Indonesia taxes machine-rolled cigarettes more than it taxes hand-rolled ones. The two products are quite different in appearance and readily distinguishable, as I learned from a recent talk by Professor Marina Welker of Cornell at Duke. Consumers are shifting from hand-rolled to machine-rolled, but the tax differential may nudge them to stay with the more labor-intensive product.
A more general robot tax is hard to imagine. But this narrow tax hits not only robots, but also tobacco.
3 ways to tax “robots”?
Directly, when placed in service.
– On income robots produce.
– Excise on products robots produce.Links: