Bill Gates is of the belief that companies that put a robot on the payroll might have to pay for it like you would a person. The Microsoft co-founder is calling for taxes on AI and robots as part of a broader plan to stop automation from moving faster than society can handle.
No, this isn’t Gates suddenly becoming anti-technology. He is essentially arguing that the tax system is giving companies a financial reason to choose machines over people.
The loophole making robots cheaper than humans
Gates’ argument starts with payroll taxes. When a company hires a human, it pays wages and payroll taxes. But when that same company buys a robot or deploys AI, it can generally treat the technology as a business expense.
So, from a company’s perspective, automation can come with a built-in financial advantage. Gates argues that the tax system is effectively nudging employers toward replacing workers with machines. His proposed fix is to tax AI or robots in a way that makes the transition away from human labor less financially attractive.
Gates thinks AI is moving way faster than expected
Gates is not predicting that every human will wake up unemployed tomorrow. But he does think we’re entering a technological transition that’s considerably more disruptive than previous revolutions.
In a new essay, he argues that AI could become an enormous force for good in areas such as medicine and agriculture while simultaneously creating serious problems, including unemployment, risks to children, cyberattacks and even the possibility of increasingly capable AI systems acting against human interests.
And he’s clearly less comfortable with the pace of development than he once was. In an interview with CNN’s Anderson Cooper, Gates said today’s AI models have become dramatically more capable faster than he expected.
People are already worried about this
The anxiety isn’t coming only from Silicon Valley billionaires. A recent Pew Research study found that 71% of U.S. adults expect AI to result in fewer jobs over the next two decades, up from 64% in 2024. Only 5% expect AI to create more jobs.
Young adults aren’t feeling particularly optimistic either, as 73% believe AI will reduce their career opportunities over the next 20 years.
Where would the robot-tax money go?
As opposed to suggesting the government collect a giant pile of robot money and simply admire it, Gates wants the revenue used for things like worker retraining and stronger social safety nets.
There is also a practical reason for that. If fewer people work because AI replaces them, governments could collect less income and payroll tax while simultaneously having to spend more on unemployment assistance, retraining, and other support.
Gates’ argument is basically that if automation changes who gets paid, someone has to figure out how society keeps paying for everything else. But he also wants the tax designed carefully enough that it does not punish AI applications that provide clear public benefits, such as making medicine and education cheaper.
Gates has been here before
Gates proposed a robot tax nearly a decade ago, and economists weren’t exactly lining up to applaud. Former Treasury Secretary Larry Summers criticized the idea in 2017, arguing that taxing robots could amount to protectionism against technological progress.
Other economists have made a related argument, noting that discouraging companies from investing in automation could reduce economic growth, particularly because robots don’t always replace workers. Sometimes they work alongside them and create new opportunities.
That’s the fundamental problem with the robot-tax idea. What if the robot you’re taxing isn’t actually stealing someone’s job? A machine might make a worker more productive rather than replace them. A tax that treats both situations the same could end up punishing useful automation.
Gates’ response to the criticisms is that those arguments don’t fully account for the broader social value of keeping people employed. According to him, society may be able to tolerate a little economic inefficiency if it means giving workers more time to adapt.