  Decomposing taxes by source (labor, capital, sales), we analyze the impact of
automation (1) on tax revenues, (2) the structure of taxation, and (3) identify
channels of impact in 19 EU countries during 1995-2016. Robots and Information
and Communication Technologies (ICT) are different technologies designed to
automate manual (robots) or cognitive tasks (ICT).
  Until 2007, robot diffusion led to decreasing factor and tax income, and a
shift from taxes on capital to goods. ICTs changed the structure of taxation
from capital to labor. We find decreasing employment, but increasing wages and
labor income. After 2008, robots have no effect but we find an ICT-induced
increase in capital income, a rise of services, but no effect on taxation.
Automation goes through different phases with different economic impacts which
affect the amount and structure of taxes. Whether automation erodes taxation
depends (a) on the technology type, (b) the stage of diffusion and (c) local
conditions.
