A new report by Deutsche Bank has posed a difficult question for workers in the post-pandemic age: Should employees opting to work from home pay a tax to support those who cannot afford to do so?
The report by Deutsche Bank Research titled ‘What we must do to rebuild’ examines policy questions for managers given the recent news of the successful results from the Pfizer vaccine and the election of Joe Biden as President of the US.
The report notes the growing disenfranchisement among young people against a system they view as being “rigged against” them, noting also how economic inequality has been heightened by the pandemic, particularly in access to technology and connectivity.
The section titled “A work-from-home tax” suggests a five per cent tax on employees that would leave them “no worse off than if they worked in the office”.
“People who can WFH and disconnect themselves from face-to-face society have gained many benefits during the pandemic. A five per cent tax for each WFH day would leave the average person no worse off than if they worked in the office. It could raise $49bn per year in the US, €20bn in Germany, and £7bn in the UK. That can fund subsidies for the lowest-paid workers who usually cannot work from home,” the summary says.
“For years we have needed a tax on remote workers – COVID has just made it obvious,” writes Luke Templeman in the report. Noting that the growing preference was WFH offers savings on travel, lunch, clothes and cleaning expenses, as well as on indirect savings for “foregone socialising” with colleagues, it points out that the sudden shift to WFH is a “big problem for the economy” as it has “taken decades and centuries to build up the wider business and economic infrastructure that supports face-to-face working”.
The report suggests that the employer pays the tax if it does not provide workers with permanent desk, and that employees pay it if they choose to work from home regardless. The tax amount, which would work out to $10 per working day for a US-based employee making $55,000 a year, is described as “roughly the amount an office worker might spend on commuting, lunch and laundry, etc”.
The idea is to use the funds raised, which could be up to $48 billion in the US, to support a $1,500 grant for around 29 million workers who cannot work from home and who earn under $39,000 a year.
Curiously, in Canada, the opposite of such a tax is in effect: CBC reported that lakhs of Canadians could be eligible for a tax break from a “work-space-in-the-home” deduction that could be applicable for those who work at home for over 50 per cent of their time, due to the additional expense they incur in terms of household expenses like electricity and cleaning.
