Automation and taxation

Hötte, Kerstin, Theodorakopoulos, Angelos and Koutroumpis, Pantelis (2024). Automation and taxation. Oxford Economic Papers, 76 (4), pp. 945-969.

Abstract

Do automation-induced changes in labour and capital income undermine public revenues? Decomposing taxes by source (labour, capital, sales), we analyse the impact of automation on tax revenues and the structure of taxation in nineteen EU countries during 1995–2016. Before 2008 robot diffusion was associated with a decline in total tax revenues and taxes from capital, along with decreasing labour and capital income and output. After 2007, the negative effects diminish. Information and Communication Technologies show a weak negative but persistent effect on total tax revenues and taxes on goods for the full period, and an increase in capital income. Overall, the impact of automation on production and taxation varies over time. Whether automation erodes taxation depends on the technology and stage of diffusion. Concerns about public budgets appear myopic when focusing on the short run and ignoring relevant technological trends.

Publication DOI:	https://doi.org/10.1093/oep/gpae006
Divisions:	College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship College of Business and Social Sciences > Aston Business School > Centre for Personal Financial Wellbeing
Funding Information:	This work was supported by the European Union Horizon 2020 Research and Innovation Programme [822330].
Additional Information:	Copyright © Oxford University Press 2024. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in anymedium, provided the original work is properly cited.
Uncontrolled Keywords:	Technological change,ICT,Robots,Fiscal revenues,Labor
Publication ISSN:	1464-3812
Data Access Statement:	Supplementary material is available on the OUP website at the article page [https://doi.org/10.1093/oep/gpae006]. These are the online appendix and the replication package contained in the zip folder htk_replication_package.zip. The replication package includes the Stata code used to produce all tables and figures and all associated publicly available data. However, the proprietary dataset ‘World Robotics 2016’ with information on robot deliveries and stock is purchased from the commercial provider International Federation of Robotics - IFR (https://ifr.org/) and, therefore, we are not allowed to make the data public. Any interested researcher can purchase the data directly from IFR. The replication package provides detailed information about the data sources, variables, and steps to estimate all results, export tables and plot figures for both the manuscript and online appendix
Last Modified:	21 Nov 2024 08:20
Date Deposited:	18 Mar 2024 15:13
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Related URLs:	https://academi ... gpae006/7630148 (Publisher URL) http://www.scop ... tnerID=8YFLogxK (Scopus URL)
PURE Output Type:	Article
Published Date:	2024-10-01
Published Online Date:	2024-03-15
Accepted Date:	2024-02-16
Authors:	Hötte, Kerstin Theodorakopoulos, Angelos ( 0000-0003-4151-4887) Koutroumpis, Pantelis