🤔 Deustche Bank study poses question, "Should additional tax be imposed on remote workers?"

Hrishikesh Pardeshi

Hrishikesh Pardeshi

Second time I've seen this headline this week (didn't read the first time, but it's possible it may also be based on the same DB report).

While my knee-jerk reaction is obviously 'uh, no,' I can appreciate the considerations it raises after actually reading DB's argumentation as it's been presented in the article. In a nutshell, the idea is that if (when?) large numbers of people shift away from the centralized commute-to-office way of life, then there will be negative economic impacts to all the surrounding infrastructure set up around this. As such, this idea (it's important to emphasize the report is just an idea/thought exercise) would be to levy a "remote" tax per employee, ideally charged to the employer which would then be distributed to those who cannot work remotely. See below snippet for a proposed breakdown:

“If we assume the average salary of a person who chooses to work from home in the US is $55,000, a tax of five per cent works out to just over $10 per working day. That is roughly the amount an office worker might spend on commuting, lunch, and laundry etc. A tax at this rate, then, will leave them no worse off than if they had chosen to go into the office.”

According to Templeman’s calculations, it would raise $48 billion per year. He proposes it be used for a very specific purpose – to give grants of $1,500 to the 29 million workers who cannot do their jobs from home and who make less than $30,000 a year: “Many of these people are those who assumed the health risks of working during the pandemic and are far more ‘essential’ than their wage level suggests.”

Thoughts from the RC community?

Here's what our users had to say:

  • Shahul Rashik said "Thanks for sharing this, Justin. 😃 Like every other innovation, Remote work also has its own both benefits and drawbacks. But at this moment it surely isn’t hurting the federal govt. to impose a 5% tax on people working from home.  It is not an undesirable activity to be curtailed by prohibitive taxation. Researcher Luke Templeman said that remote workers are contributing less to the infrastructure of the economy whilst still receiving its benefits. Although, I completely understand the argument that the report has put forward i.e addressing the imbalance between the remote workers and people who can’t work from home.  I feel people who aren't able to work from home would be better off with essential reforms such as increasing minimum wage, providing equal pay, fostering an inclusive work environment, and providing employee health benefits rather than by giving grants.  Also, with Deutsche Bank holding a large number of vacant office buildings, it is now apparent why Templeman is suddenly concerned about getting people back to offices. A better logical method would be a tax that could be levied by the cities and states losing workers to telework. Instead, he suggests a federal tax designed to strip away the financial benefit of remote work, confiscating employees’ savings by staying at home. Powerful institutions are going to come up with various methods to get people back to the offices and this seems to be one of them. And finally, imposing a penalty for being able to work remotely is just unacceptable. 😤"

  • Hrishikesh Pardeshi said "Templeman envisions it being paid by employers who choose to economize by asking their workers to stay home, rather than pay for a seat at an office, and by employees who are offered such a seat but opt to stay home instead.  The biggest problem is DB suggesting that individuals be taxed for choosing to work remotely. It comes off as a penalty for choosing to lower overheads (office rent, utilities etc.). Individuals end up paying extra for home office, bills, co-working space etc. Most companies don't reimburse any of that or even if they do, it's a very small amount. So the additional taxation on individuals is quite unfair in my opinion. However, taxing companies for choosing to work remotely might still be something to consider. Although it would heavily deincentivise them from opting to go remote. Another thought - More companies & individuals working remotely = huge, positive impact on the climate. Shouldn't the state incentivise (instead of tax) for choosing to work remotely and opting for an environment-friendly behaviour?"

  • Boris Borisov said "My opinion? Taxes........ no. 😄   I think it's bullshit. The logic is - people who work remotely, save money. So they have money to pay more taxes."