Finland discusses taxing AI work — YLE News
Finland is discussing the possibility of taxing work performed by artificial intelligence amid concerns about the technology’s impact on the labor market. As YLE News reports, more than half of respondents in a survey commissioned by the broadcaster in the summer fully or partly agreed with the statement that AI will cause mass unemployment.
The idea of a tax on artificial intelligence labor was previously put forward by Microsoft founder Bill Gates, Democratic Senator Bernie Sanders, and Nobel Prize-winning economist Robert Shiller. Venture investor Vinod Khosla also called for an overhaul of the U.S. tax system and, as an extreme option, proposed taxing tokens. The issue of taxing AI has also been raised in Finland’s parliament.
The problem of defining machine work
Kaisa Kotakorpi, a professor of economics at Tampere University, noted that there has so far been little research on AI’s impact on the labor market and taxation, making the consequences difficult to predict. According to her, the topic of a robot tax is close to this discussion and has been debated in Finland and other countries for at least around ten years.
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The main problem with such a tax is determining the boundary between technology that replaces human labor and technology that merely increases workers’ productivity. Taxing robots could also effectively apply to productivity gains from new technologies, which could weaken incentives for innovation. At the same time, Kotakorpi stressed that possible negative consequences of AI development, including a sharp rise in income inequality, should be monitored and ways to respond should be sought in advance.
Changing the tax base
Salla Kalin, a researcher at the Labour Institute for Economic Research Labore, said that taxes that are difficult to define are easier to avoid, while poorly designed taxes may restrain investment in productive technologies. Instead of a separate tax on a specific technology, she proposes comprehensively adapting the tax system to economic changes.
Joonas Tuhkuri, an associate professor of economics at Stockholm University, noted that there is currently no empirical evidence of significant worker displacement by artificial intelligence. He warned that taxing AI could affect not only automation but also beneficial innovations, including protein modeling for drug development. If revenue from labor taxation declines, the tax base will have to be supplemented from other sources, including capital, property, or consumption.
