Recently Deutsche Bank Research team proposed a new work from home (WFH) tax. According to DB researchers “for years we have needed a tax on remote workers – covid has just made it obvious“.
And people who work from home must be taxed because “remote workers are contributing less to the infrastructure of the economy while still receiving its benefits” and “saves money on travel, lunch and socializing” say DB analysts.
So does it mean if somebody brings lunch box to the office instead of buying fast food in the corner shop must be taxed as well? What about if somebody takes a bus instead of car just to save money on road tolls and parking in the city center? Should such person taxed also?What about a person who lives in a walking distance to the office from home? Should that person taxed because it doesn’t pay road tolls?
May be taxation system should be changed because of shifting economy, but the arguments are ridiculous.
Employee working from home did not spend anything on transport infrastructure
Is it bad? If less people are commuting it means less traffic, less traffic congestion, less pollution, you don’t need such wide highways or autobahns and decrease such roads maintenance cost.
Working from home offers direct financial savings on expenses such as lunch, clothes, and etc
DW wants to say people working from home don’t eat and don’t wear clothes? Some of them are still choosing food delivery, so no much savings here. The rest are preparing food by themselves at home, and it means more grocery shopping, larger electricity/gas bills. But the best thing is – part of people are eating more healthy at home and it means less health problems, less doctors visits and the person can be more productive during a year, makes more money and pays more taxes without any additional WFH taxes.
A tax of five per cent works out to just over $10 per working day.
Yes, right.
the average salary of a person who chooses to work from home in the US is $55,000, a tax of five per cent works out to just over $10 per working day.
Deutsche Bank Research
We prefer it calculate differently – $55,000 * 5% = $2,750. So by introducing WFH tax a person will pay additional $2,750 tax a year. It doesn’t sound “just over $10” any more, right?
In UK it will be “just” £7 per day, or “just” €7.50 per day in Germany. By converting it to annual values it will be £1,750 a year in UK or €2,000 a year in Germany.
A WFH tax does not merely subsidise businesses that have no long-term future
A WFH tax does not merely subsidise businesses that have no long-term future. If, for example, a city-centre sandwich shop is no longer needed, it does not make sense for the government to support the business in the medium term
Deutsche Bank Research
So what exactly this WFH tax will support? In the study it doesn’t identify exact social groups which should be supported additionally. Every government would be happy to tax people more but at the moment we don’t see any serious arguments to support introduction of WFH tax.
Source: https://www.dbresearch.com/PROD/RPS_EN-PROD/PROD0000000000513736/A_work-from-home_tax.pdf
P.S. Meanwhile UK government offer tax relief for your job expenses while working from home.