Category: Economics

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.

Snip

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.

Some friends on the Book of Face shared a couple of articles that reinforces my belief that cities, particularly the largest metropolises, are about to enter a depression.

First is an article about the impending death of New York. He makes an interesting case about the damage done by COVID may be the mortal blow.

Second is an article on people fleeing San Francisco.

Between COVID and the riots, I believe many folks are asking themselves if all the costs of living in these cities are worth the cost. For a lot of them – particularly those who can do their work remotely – will answer no. They will move to lower cost and relatively safer cities. There will be many cascading effects from the diaspora, but two that I’m watching with interest.

1. Will this cause the wave of municipal and state bankruptcies some of us have been expecting for some time? If so, does the fed step in? I’m kinda thinking that if it plays out where the fed has to go in and sort out the states – and cities – messes, the states and cities will become even more the puppets of Washington. It may also accelerate the feds reckoning, but that’s kind of like a runaway train on a flat track. We know it’s a matter of time when it will derail, but we can’t see where.
2. What will happen when the refugees from these cities start voting in their new home areas? Will they adopt the values of their new homes? Will they try to bring the “perks” and “expectations” (along with the requisite taxes and regulations) to their new homes? Based on prior experience, I’m not too hopeful.

The headline is misleading. California wants all big rigs and medium duty vehicles to be electric by 2045. They do mandate the shift to start in 2024.

There are far too many people (a lot in legislatures) who have this almost dogmatic faith in laws creating reality. Never mind little things like physics or economics. As Thomas Sowell reminded us, those in power rarely suffer the consequences of their actions, but suffer the wrath of voters for their inactions.