To help economy, bank proposes tax on working from home

To help economy, bank proposes tax on working from home

Working from home should be taxed to help support people on low incomes who can not do their jobs remotely, Deutsche Bank said Tuesday.

He suggests that employers pay the tax if they do not supply their workers a permanent desk, but if an employee chooses to work remotely, then the cost would fall on the workers, self-employed and low-income employees excluded.

The report from the bank's economic research unit has calculated that this tax could raise $49 billion (GBP 37 billion) a year in the US, GBP 7 billion in the United Kingdom, and Euro 20 billion (GBP 17.8 billion) in Germany.

The report argues that people working from home are saving money and not paying into the system like those who are leaving their homes to work, an imbalance that it says has been made clear during the coronavirus pandemic.

"The sudden shift to WFH means that, for the first time in history, a big chunk of people have disconnected themselves from the face-to-face world yet are still leading a full economic life", said Luke Templeman a researcher, in the report. "We argue that remote workers should pay a tax for the privilege", Jim Reid, research strategist at Deutsche Bank, said in the report.

It would breakdown to about $10 per working day for a US employee that has an average salary of $55,000, which Templeman said is about how much they would spend on commuting, lunch, and laundry, and other general daily work expenses.

For UK workers, a 5 percent tax on an average salary of £35,000 equates to roughly £7 per day.

"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", the reports said. Some work from home because their companies have closed the offices they would normally go to.

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.

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He said: "Working from home will be part of the "new normal" well after the pandemic has passed". But what if you had to pay a separate tax to work from home?

'The virus has benefited 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.

To solve for this problem, he proposes a work-from-home tax on 5% of wages.

Economists with Deutsche Bank recently proposed forcing people to pay five percent per day for remote working.

A new report by Deutsche Bank has posed a hard question for workers in the post-pandemic age: Should employees opting to work from home pay a tax to support those who can not afford to do so?

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

The idea came from the bank in a report on post-COVID-19 rebuilding of the economy.

Last month, a study of 1,000 businesses by the Institute of Directors (IoD) found that 74 percent planned on maintaining increases levels of working from home.

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