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Deutsche Bank Report Eyes WFH Tax To Boost Economy

A tax for working at home? Really?

Yes, says Luke Templeman, a thematic strategist at Deutsche Bank in Konzept, the bank’s recently issued research report.

Before the pandemic, the number of work-from-homers shot up 173 percent in the United States between 2005 and 2018, the report notes.

While the total number — 5.4 percent — was still relatively small leading into the coronavirus pandemic, the remote workforce in the U.S. still grew at a considerably faster pace than employment as a whole

Enter Covid-19.

The coronavirus pandemic hit the U.S. in full force last March, and overnight it resulted in a tenfold increase in work-from-homers, with 56 percent of Americans having made the switch, as well as 47 percent of the workforce in the United Kingdom.

And freed from grueling commutes, more than 30 percent say they plan to continue working from home at least two days a week, even after the virus has finally been suppressed, according to Deutsche Bank.

However, the shift to remote work is bad news for a large segment of the economy, especially those in the restaurant and other service jobs in downtown or suburban commercial hubs, Deutsche Bank researchers contend.

As the number of office workers going to lunch or making coffee runs drops off, governments in the U.S. and other countries will need to step up and tax remote work, using the money to help workers in service sectors whose jobs are imperiled by the trend, the Deutsche Bank researchers argue.

“For years we have needed a tax on remote workers — covid has just made it obvious,” Templeman writes. “Quite simply, our economic system is not set up to cope with people who can disconnect themselves from face-to-face society. 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.”

And how much of a tax are we talking about?

Deutsche Bank’s Templeman estimates propose a roughly $10 a day tax on remote workers in the U.S., whose average salary is $55,000.

That would raise $48 billion, and the company would pay the tax — that is unless the employee has the option of working in the office.

At that point, the employee working from home would be stuck with the tab.

And why $10 a day?

“That is roughly the amount an office worker might spend on commuting, lunch, and laundry etc.,” Templeman writes.

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