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The Wyman Symposium 2017

By Julia Penny

The annual lecture and debate was on the topic of the future of taxes on labour (as opposed, for instance, on capital or costs etc). The event looked at issues ranging from the planned and now scrapped changes to self-employed NICs to the impact of Artificial Intelligence (AI) on both employment and tax consequences.

You might think that a tax symposium looking at the idea of AI is a little far-fetched, but Calum Chace, a writer and speaker on AI, reminded us at the start of the evening that self-driving cars are likely to fully functional and on the roads in five years. That alone means that vast numbers of cab drivers and truck drivers are likely to find themselves without a job.

But of course, it isn’t just self-driving cars that threaten jobs in the future. AI can already do many of the tasks traditionally done by lawyers and doctors for example, and is edging into accounting and auditing as we speak. So Calum’s vision of the future is that for 50% of the population (or more) there just won’t be any work to do. Now if that sounds apocalyptic, then this is not Calum’s vision – he is looking forward to an efficient world with low-cost products and services where a lack of work means more leisure time, not destitution.

Of course, there is also an awareness that the vision could be wrong. Maybe, just like in previous industrial revolutions, jobs will just shift to ones that we can’t yet imagine and we will still have a largely working adult population.  But we can’t guarantee that and if the future means very little employment, a tax system predicated on getting the major chunk of required revenue from labour just will not cut it.

Instead, we need to plan ahead, to consider how this new world might operate and ensure we don’t spiral into a hellish dystopia. If actually nothing much changes, other than the nature of jobs that we do, well never mind, we have planned for a possible (even likely) scenario and it didn’t ultimately happen. Better to have planned and find the planning isn’t needed, than not to have planned and plunge into the abyss!

Even without the impact of AI, there is already a shift from employed to self-employed with the Taylor report considering how we might deal with a changing and “sharing” economy. Colin Ben-Nathan from KPMG looked at the numbers and the options for turning NIC into a tax on something other than labour. Perhaps it should instead be a social contribution – based on operating costs or some other tax base that doesn’t distinguish between whether people or computers are doing the job in hand.

Helen Miller from the Institute for Fiscal Studies explained the danger of ignoring these huge shifts in work patterns and the increasing reliance on capital (in the form of computers) for wealth generation. She is worried, as has so often happened before (eg the pensions time-bomb), that the issue will be ignored until it is too late. Again, the key point is that capital and labour should be taxed in a more even-handed way. Otherwise you get even more distortion by encouraging companies not to use labour, but capital, if the tax impacts of the latter are cheaper. Whilst incentives to invest may still be needed, there are lots more targeted ways to achieve this, apart from always charging lower rates on income generated from capital investment.

Finally, Ian McCluskey of PwC talked about how we are entering the “platform, artisan and ‘how the hell do we deal with AI’” economy. A final golden age of work. The platform economy is the bit based on platforms, such as those self-publishing their work or making use of other digital platforms. The artisan economy covers things like real ale and of course, we really don’t know too much about AI, although apparently we are getting very close to having robotic carers for our elder generation.

The theme across all four speakers and in the subsequent debate, was clear –we need to address the shifting patterns of work and value generation. Right from the granular level such as NIC up to the capital vs labour basis for tax.  

September 2017 

 

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