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Deutsche Bank: Tax home workers 'to help pay those who cannot'

By Justin Harper
Business reporter, BBC News

Published
10 hours ago

Woman working from home with baby. image copyrightGetty Images

Working from home should be taxed to help support workers who jobs are
under threat, according to a new report.

Economists at Deutsche Bank suggest a tax of 5% of a worker's salary if
they choose to work from home.

The tax would be paid for by employers and the income generated would
be paid to people who can't do their jobs from home.

This could earn $48bn (£36bn) if introduced in the US and would help
redress the balance, the bank says.

It argues this is only fair, as those who work from home are saving
money and not paying into the system like those who go out to work.

In the UK, Deutsche Bank calculates the tax would generate a pot of
£6.9bn a year, which could pay out grants of £2,000 a year to
low-income workers and those under threat of redundancy

"For years we have needed a tax on remote workers," wrote Deutsche Bank
strategist Luke Templeman. "Covid has just made it obvious."

"Quite simply, our economic system is not set up to cope with people
who can disconnect themselves from face-to-face society.
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Deutsche Bank Research predicts that workers in the US will now spend
4.6bn days a year at home rather than in the office.

A 5% work-from-home (WFH) tax on an average $55,000 salary works out at
about $10 a day in the US. For the UK, the tax equates to about £7,
based on a salary of £35,000.

"Those who can WFH receive direct and indirect financial benefits and
they should be taxed in order to smooth the transition process for
those who have been suddenly displaced."

Millions of people have shifted to working from home as employers
closed offices to contain the spread of Covid-19.

Many big employers have said they will allow some staff to permanently
work from home either full-time or part-time after the pandemic is
over.

Jobs under threat

However, there are millions more who can't work from home, such as
nurses and factory workers for example, and the tax should help support
these roles, argues Deutsche Bank.

"The virus has benefitted those who can do their jobs virtually, such
as bank analysts, and threatened the livelihoods or health of those who
can't," added Mr Templeman.

He also argues that remote workers are contributing less to the
infrastructure of the economy "whilst still receiving its benefits".
media captionPubs are offering office space for people having to work
remotely

By working from home, people aren't paying for public transport or
eating out at restaurants near their places of work, while expensive
offices remain virtually empty.

"WFH offers direct financial savings on expenses such as travel, lunch,
clothes and cleaning," he said.

The 5% tax rate "will leave them no worse off than if they had chosen
to go into the office".

Research from Deutsche Bank shows that one third of people want to
continue working two days a week from home once the pandemic is over.

How would the tax work?

The tax would be paid directly by employers who choose to let employees
work home.

But it would not apply to "the self-employed and those on low incomes".

It also wouldn't apply when people are asked to stay home for a public
health emergency or other medical reasons.

The tax revenues would be used for a very specific purpose - to give
grants to the millions of workers who cannot do their jobs from home
and who make less than $30,000 a year.

Deutsche Bank says its research is designed to spark debate around a
series of important topics.

Report author Mr Templeman said he'd had a lot of feedback on the
report.

"A lot of people aren't impressed at the idea of another tax, however,
some have seen it as an interesting policy that governments can use to
redistribute some of the gains from the pandemic which have been
unexpectedly accrued by some people while others have lost out."
(BUTTON) View comments

Related Topics

* [56]Deutsche Bank
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