News & Commentary

June 15, 2023

Maddie Chang

Maddie Chang is a student at Harvard Law School.

In today’s Tech@Work, responding to recent Republican tax proposals, some lawmakers raise concerns that the tax code incentivizes automation; civil groups urge the FTC to address algorithmic discrimination in a number of contexts including employment; and UberEats drivers in Johannesburg are finding themselves locked out of the app amidst power outages. 

On Tuesday, Republicans in the House Ways and Means Committee advanced a set of tax proposals that includes an extension of the “bonus depreciation” – a Trump-era tax deduction that allows businesses to write-off certain assets including automation software and equipment. In response to this element of the suite of proposals, some Democratic lawmakers have raised concerns that the tax break incentivizes automation at the expense of workers. As reported in Bloomberg, Sen. Mark Warner (D-Va.) asked, “Why do you get a tax credit if you buy a computer, but if you train two human beings to do better you don’t get any of the same benefits?” This question echoes the findings of a 2020 report by three MIT economists, which finds that labor has been taxed an average rate of 25% over the past 40 years, whereas the “average tax rate on software and equipment stood at about 15% in the 1990s and fell to about 5% after a series of tax reforms in the 2000s and 2010s.” Sen. James Lankford (R-Okla.) noted that “most of what is invested in bonus depreciation actually helps humans be more efficient at [their jobs].” As lawmakers look to regulate artificial intelligence (AI) in the coming weeks and months, this question of how automation is taxed may resurface.

Meanwhile, last week, in light of renewed interest in regulating AI, a group of 40 civil rights organizations urged the Federal Trade Commission (FTC) to take account of the impact of automation on a discrimination in a number of sectors, including employment. Last summer the FTC published an advance notice of proposed rulemaking (“ANPR”) to “request public comment on the prevalence of commercial surveillance and data security practices that harm consumers.” As the FTC weighs comments, the coalition of civil groups is asking the FTC to separate out anti-discrimination rulemaking from other rulemaking on data security and privacy issues. The letter to the FTC emphasizes that increased use of AI and data-driven tools may exacerbate existing discrimination in employment, and recommends that the FTC audit such tools on an ongoing basis. 

Finally, South African UberEats workers have reported being banned from the app due to connectivity issues resulting from rolling power outages. As reported in Rest of World, drivers in Johannesburg who work for the food delivery app have been contending with power cuts of up to six-hours, which has disrupted access to Uber Eats internal map and GPS services. The company responded that “UberEats does not arbitrarily deactivate delivery people.” But workers have reported that when they turn to alternative map apps like GoogleMaps after encountering connectivity issues on the UberEats app, they find themselves locked out of their UberEats accounts.

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