With taxation, the smaller companies can keep up, because the large companies, that have automated everything, and just one maintenance guy working there, have to pay a lot, not to have any employees.

Yes, so you need more labor to get the same amount of product. Isn’t that what I wrote?

I agree that use of machines can give you economies of scale, which makes large businesses more competitive. So a tax on automation could indirectly benefit smaller businesses at the cost of society. I am not quite sure why a society would want that, though?