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The Future of Taxation in Wall-E

In academia on June 3, 2009 at 4:45 pm

The projection of a dystopia in Wall-E allows us to infer how our systems of taxation may evolve in response to specific changes in economic relations. With a government that must sustain its outer space program through huge expenditures on infrastructure across the galaxy, the question of how the subjects, rates and base of taxes are determined is a primary concern for the future taxpayer.

First, we must determine society’s economic structure as portrayed in the film, and then interpolate the possible system of taxation that can support this arrangement. It is explicitly presented that, by virtue of developments in artificial intelligence, the function of labor as a factor of production has already been absorbed by capital. Robots like “Wall-E” and “Eve”, which are capital goods, can perfectly substitute human productivity. This is indeed the case shown in the film: there is no more need for humans to work. This results into a near 0% human productivty, with only a few human engineers working to support the system of a fully automated society. Business enterprises also cannot exist because human beings, unable to create wealth, can no longer become spenders. Even land (strictly speaking, there is no more “land” if all people live in a luxury starliner) becomes a function of capital because the expansion of “real property” occurs as capital goods are utilized to create more starliners for people to live in.

Thus, taxes can no longer be levied on individual income, business income and real property. For the taxpayer suffering from the heavy burdens imposed by taxation laws in the present age, the world presented in “Wall-E” is a utopia, an absolute tax heaven.

In “The Science of Wealth”, Walker asserts that a government “rightfully claim[s] a share of all labor and capital have created” in order to maintain itself. But since we have established that capital determines land and labor in this type of economy, only the people who own capital can be the proper subject of taxes. Moreover, since the government owns all the capital in the economy, the taxpayer and the tax collector are merged into one person. Therefore, all tax obligations are extinguished.

In order to support this theory on the future of taxation under the kind of economy presented in Wall-E, I will cite two indicators in the story that are consistent with its preconditions. The first is the fact that the robot “Wall-E” was still a commodity that could be sold to people on earth before they left the planet (as evidenced by a print ad shown onscreen in the beginning of the film). This shows the necessity of trade, and it provides us a clue that as long as people live on earth, they have sufficient personal income to spend on commodities like waste-disposal robots. And as long as there is a tax base like personal income, the tax rates will apply.

The second clue is that all commodities are free in the starliner. This implies that people no longer engage in trade. Everything is subsidized by the government (it must, since the government has a monopoly on capital ownership); people no longer earn anything. They just sit down and engage in leisure, even forgetting how to walk. This is a necessary precondition for our theory to apply. In a condition where labor and real property are determined by capital, the government’s monopoly on ownership eliminates all taxes in the universe.