Optimal Taxation of Robots

Abstract I study the optimal taxation of robots, other capital, and labor income. show that it is to distort robot adoption. The tax (or subsidy) exploits general-equilibrium effects compress wages, which reduces income-tax distortions supply, thereby raising welfare. In calibrated model, when robots are expensive, a subsidy optimal. As get cheaper, becomes them. Yet, reforming status-quo system, most welfare gains can be achieved by adjusting income tax. additional from taxing differently equipment capital close zero.