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Technequality Second Webinar series, Webinar 1: 12 May 2021, 12.00 - 13.00H CET

This is the first webinar in a second series of three. If you wish to attend, please send an email to technequality-sbe@maastrichtuniversity.nl and we will send you an invitation.

Title: Does automation erode governements’ tax basis? An empirical assessment of tax revenues in Europe.

By Dr. Pantelis Koutroumpis



Decomposing taxes by source (labor, capital, sales), we analyze the impact of automation on tax revenues and the structure of taxation in 19 EU countries during 1995-2016. We show that automation goes through multiple phases, with heterogeneous economic impacts on production and its factors. In turn, this is associated with meaningful shifts in the amount and structure of taxes. Whether automation is negatively related to taxation depends on (a) the technology type, (b) the stage of diffusion and (c) local conditions. More specifically, until 2007, robot diffusion was associated with decreasing factor and tax income, and a shift from taxes on capital to goods. The emergence of ICT coincided with changes in the structure of taxation from capital to labor. At the same time, we find decreasing employment, but increasing wages and labor income.  After 2008, we do not find a robot effect, and while we observe an ICT-induced rise in capital income and employment in services, no effects materialize on the structure of taxation.

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