Employees working from home should pay ‘privilege’ tax’ to support workers who can’t, research report says

Employees who choose to work remotely should pay a tax to help those workers on low incomes who cannot, said a research note from Deutsche Bank.

According to the research report titled “What We Must Do to Rebuild,” employees who work from home receive immediate financial benefits, including reduced costs for travel, food and clothing.

The report suggests the employer would pay the tax if it does not provide the worker with a permanent desk. Otherwise, the employee would pay the tax.

“Our calculations suggest the amounts raised could fund material income subsidies for low-income earners who are unable to work remotely and thus assume more ‘old economy’ and health risks,” said Jim Reid, global head of fundamental credit strategy and thematic research at Deutsche Bank, in the report.

On an average salary of $55,000 at a tax rate of 5%, Deutsche Bank estimates the average person would pay more than $10 a day in tax, and raise a total of $48 billion a year.

The report says the tax should only apply outside times when the government advises people to work from home, as has happened during the pandemic. The tax should also exclude low-income workers and the self-employed.

As the coronavirus pandemic took hold in the U.S., many businesses required employees to work remotely to stop the spread. As the practice has become normal during the pandemic, more employers appear open to allowing remote work even after the pandemic passes.

Deutsche Bank estimates the proportion of Americans who worked from home (WFH) during the pandemic surged to 56%.

“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 researcher Luke Templeman in the report. “That means remote workers are contributing less to the infrastructure of the economy whilst still receiving its benefits.”

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