Optimal Taxation of Robots

Tuesday November 14th 2017 Uwe Thümmel (VU) will give a presentation titled 'Optimal Taxation of Robots'

November 14, 2017
13:00 - 14:00
CPB office (seminar room 2, Zeedistelzaal), Bezuidenhoutseweg 30, the Hague
Uwe Thümmel (VU)
Arjan Lejour (CPB)
Working language

I study the optimal taxation of robots and labor income in a model in which robots substitute for routine work and complement non-routine work. The model features intensive-margin labor supply, endogenous wages, and occupational choice. I show that the optimal robot tax is, in general, not zero which violates production efficiency. The robot tax is used to exploit general equilibrium effects to compress the wage distribution, making redistribution less distortive, thereby increasing welfare. The sign of the robot tax is ambiguous if routine workers are found in the middle of the wage distribution. Using the model for quantitative analysis based on US data, I find that the optimal robot tax is small and positive.


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