Deutch Bank AG’s research arm decided to advocate for a new tax. Because, according to this article from Bloomberg Wealth, “Choosing to earn a living from home once the pandemic ends is a privilege that you should pay for.”
The team propose a 5% levy for those who work from home on a regular basis and not because of a government lockdown mandate. Such a measure could raise $48 billion a year in the U.S. and about 16 billion euros ($18.8 billion) in Germany, they say, to fund subsidies for low-income earners and essential workers who are unable to work remotely.
The proposed levy would be paid by the employer if they don’t provide their employee with a desk, whereas if the worker decides to stay home based on their own needs, they would be taxed for each day they work remotely, according to Deutsche Bank Research. In the U.S., the strategists calculate, such a tax could pay for a $1,500 grant to the 29 million workers making under $30,000 a year and unable to work from home.
Let’s address the basic bullshit of this tax proposal, and pretty much all tax proposals. They always assume that people will not react to minimize their tax burden. For instance, if this tax was somehow adopted, how many employees may become contractors? How many businesses would simply reduce employee compensation to pay for this tax, resulting in loss of income tax?
All of this also ignores that those of us who work from home haven’t stopped spending money. We’ve stopped spending money in areas of the economy where we spent it before. Businesses who send their people to work from home haven’t stopped spending money. They’ve stopped spending it on the things they used to spend it on, like commercial real estate. Let the shift happen and let the new economies emerge.