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19 Comments

5% privilege tax for working remotely?

Deutsche Bank's (DB) new research suggests that remote workers should be taxed for the "privilege" of working from home!

Why should remote workers be taxed?

According to DB,

  • Those who work from home are getting a free ride. They are contributing less to the infrastructure of the economy while still receiving its benefits.
  • WFH = savings in terms of travel, lunch, laundry etc. Plus intangible benefits of greater job security, convenience, flexibility, additional safety.
  • So even if there's a 5% "privilege" tax, you would be no worse off than if you had chosen to go into the office.

You are surely joking, DB

The suggestion is so outlandish that it isn't even worth talking about, but humour me.

  • Remote workers pay extra for setting up home office, bills for electricity, heater, co-working pass etc.
  • Companies save huge costs on office rent, internet & electricity bills among many other things.

So if anyone is paying a "privilege" tax, it should be the employer. However, that would mean discouraging companies from going remote.

How about incentivising companies for environment-friendly behaviour?

Surprisingly, DB doesn't talk about the positive impact on the climate due to remote work at scale. If we assume huge number of people indeed start working remotely, shouldn't the state incentivise (rather than tax) companies for being environment-friendly?

P.S: I write regularly about remote work, tech & startups on Twitter. You can follow my updates there.

  1. 18

    Deutsche Bank should be taxed for publishing research

  2. 7

    Deutsche Bank is seeing a loss from businesses relying on office properties and services (urban sandwich shops for example). That's why they're sore.

    1. 1

      Haha, true. Few days back, there were suggestions around pay cut for working remotely and now the tax. It's funny how these ridiculous suggestions keep coming up 😅

  3. 6

    I saw this article yesterday as well and couldn't understand their logic behind this. If you are working from home you will put less stress on infrastructure like roads, public transport etc... but you are still paying your income taxes like everyone else.

  4. 5

    Deutsche Prank, go home, you’re drunk.

  5. 3

    You’re missing a piece.

    The proposal recommends that the funds be distributed to those who are unable to work from home. I think this is an important point.

    Large parts of the workforce are unable to work from home. They still have to go to work in factories or cook in kitchens or build houses etc etc.

    Instead of looking at it from a self-interest point of view, look at it from the macro point of view.

    Is it fair, that some people enjoy these new benefits and others cannot? It’s not an option to suddenly switch careers for most people, so to the people who cannot work from home, society is now putting them at a disadvantage. That disadvantage should be addressed somehow.

    I think it’s a discussion worth having and it’s very short sighted to just think about it from the knowledge-worker point of view who doesn’t want any more taxes. Nobody does. But if it’s needed to address a fundamental inequality, isn’t that beneficial to us all?

    1. 1

      It is not as simple and straight forward(rather first order) as raising revenue through taxes and redistributing it. There are second order effects to such taxes, like for instance people will eventually move out of places(why would they stay if they are already wfh) that implement this sort of tax system and you will eventually end losing revenue that you would have otherwise had. Remember, once knowledge remote workers go mainstream the whole world is your labor market, this particular tax will make you uncompetitive. I am not sure what is the need to equalize every inequality that exists in society. It is not practical to do that, and it could well be suboptimal for society as a whole.

      But agreed everything needs to be discussed.

    2. 1

      Taxing individuals who can work from home and using the funds for those who cannot would actually be a very naive way of looking at things. We are talking about the state here, who already taxes you for many other things and is responsible to utilise the funds as a whole and not a specific, direct exchange.

      As an example, it is in the state's interest to incentivise those who opt for environment-friendly behaviour. That should also be considered when coming up with a tax structure.

      I am all for addressing the inequality and helping those who are needy but asking only remote workers to take a cut is a very myopic view. It looks nothing else than being penalized for working remotely.

      1. 1

        You’re equating “work from home” with “environmentally friendly” which is an argument I don’t buy.

        Is there any conclusive data on this?

        Just because people don’t commute doesn’t mean their carbon footprint reduces to nothing. They will still order food, make trips to the grocery store, order more stuff on Amazon etc etc.

        The tax proposed is just another form of income tax I don’t see what it has to do with climate.

        1. 1

          I think the overall discussion of directly taxing the opposite party of a disadvantaged party doesn't make sense.

          Should there be more tax to men just because women are disadvantaged? Should there be more tax to the educated because the uneducated are disadvantaged?

          These are all real disadvantages but the solution being proposed is so arbitrary. Not every remote worker is rich and not every office employee is poor - so this becomes quite a penalty for remote workers.

          If a more new/efficient way of working has been found, I'm not sure the way to help the traditional form of working is by taxing the former.

          1. 1

            Saying that we don’t do this in other areas therefore we shouldn’t do it here, is not a strong argument.

            We should evaluate this proposal based on its own merits.

            1. 1

              That's not the argument I made - gave examples of other areas but did provide basis for why this logic is flawed by itself.

              This proposal has no merit and showcases a poor sense of economics from an institution that should understand the subject better.

  6. 3

    Good to know, another company I'll never want to work for :)

  7. 2

    DB should stop getting bailed out.

  8. 2

    "How about incentivising companies for environment-friendly behaviour?"

    F-yeah. I've lived near Boston, one of the US cities with the worst rush-hour traffic, and it just seems so obvious of a way to combat the cause of so much frustration. No one wants bloated, misery-induced commute times.

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