Deutsche Bank strategist proposes tax on home office

D.he corona pandemic has banned many employees from working from home, at least temporarily. Not everyone is uncomfortable with it. If the strategists of Deutsche Bank have their way, they should pay for this profit in the future. “Those who can work from home receive direct and indirect financial benefits and should be taxed to make the transition smoother for those who were suddenly ripped off,” writes strategist Luke Templeman in a memorandum.

He proposes a tax of 5 percent for those who volunteer in the home office. Such a measure could bring in $ 48 billion annually in the United States and around EUR 16 billion in Germany. This could finance subsidies for low-wage earners and indispensable workers who are unable to work from home.

Working from home had become increasingly popular even before the pandemic. The Internet enabled a 173 percent increase in regular home work in America between 2005 and 2018, even if it was still only 5.4 percent of the workforce. The pandemic acted as a “turbocharger” and pushed this proportion up to 56 percent. In Great Britain the share has increased sevenfold to 47 percent.

Many of them would continue to do so in the future, after all, two-thirds of all organizations said that at least three-quarters of their staff could effectively work from home. A survey of our own shows that more than half of those who should have tried the home office now want to continue working from home for two to three days in the future.

Savings outweigh costs

These remote workers contribute less to the infrastructure than they get from it. This is a big problem because it has been built up over centuries for centralized work. If a large part of these assets are not used, the economic malaise will be extended.

Home office brings savings in transportation, nutrition, clothing and cleaning. In addition, there would be indirect savings through socially determined expenses and immaterial advantages such as greater job and personal security, convenience and flexibility. These values ​​are greater than the associated costs, such as the compatibility of work and child-rearing and less favorable workplace equipment.

The tax should then be paid by the employer if he does not provide the homeworker with a permanent home office. For the United States, a tax rate of 5 percent for current homeworkers corresponds to a fee of $ 10 per working day. This roughly corresponds to the expenses for trips to work, meals and other related expenses, so that these would not be worse off. In Great Britain this corresponds to 7 pounds and in Germany 7.50 euros.

Bonus for low wage earners

For the company, the advantages could still outweigh the other, writes Templeman. In Germany, the tax revenue could be used to finance a premium of 1500 euros to the 12 percent of the population with the lowest incomes. Many of them were among those who are believed to be exposed to the greatest health risks during the pandemic and which are far more important than their wages suggest.

Templeman counters the argument that no one should be punished for his or her personal decision that taxation has always been adapted to social developments. An income tax was not enforceable for a long time. Society is moving in the direction of “human decoupling” and with it the tax system must also change. A home office tax also does not subsidize companies that have no long-term future. If a shop for sandwiches in the city center is no longer needed, it does not make sense in the medium term to support it by the state.

However, it makes sense to support people who have been torn from their familiar surroundings by forces that are beyond their control. Many would have to take on low-paid work, meanwhile they would have to relearn and find out how to proceed. Those fortunate enough to be able to decouple themselves from centralized society owe it to those who are not granted it.

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