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A Deutsche Bank study suggests charging employees a rate of 5 percent of their salary if they choose to work from home when the current pandemic does not force them to do so. The income generated by this tax would go to those who cannot work from home.
According to the BBC, Luke Templeman, author of the report, says he has received a great response: “Many people are not impressed by the idea of paying another tax, while it seems interesting. “
DELFI in brief
A Deutsche Bank study found that half of workers would like to continue working from home two to three days a week after the pandemic.
According to a study by Deutsche Bank Research, the 5% tax on the average salary of a teleworker, could raise $ 48 billion in the United States. $ 6.9 billion per year in the UK. £ 15.9 billion in Germany. euros.
This would cover the cost of subsidies paid to people who cannot work from home and who receive lower incomes.
Telecommuting won’t go away after a pandemic
The report claims that between 2015 and 2018, the number of people who regularly work from home increased by 173 percent due to internet technology.
“The truth is that the overall proportion of people who worked from home before the pandemic was still low, only 5.4%, according to the relevant data, but the growth trend was clear. During the pandemic, the proportion of Americans working from home increased tenfold to 56 per cent In the UK, the number of people working from home has risen to 47 per cent.
Many of these people continue to work remotely for some time. In fact, two-thirds of organizations say that at least three-quarters of their staff can work productively from home, according to S&P Global Markets.
Meanwhile, a DB study shows that after the pandemic, more than half of the people who have tried to work from home would like to continue working full time two to three days a week, ”the report says.
According to Deutsche Bank, the sudden transition from work to home means that, for the first time in history, a large proportion of people who have become disconnected from communicating with the tête-à-tête world continue to live full economic lives. This means that telecommuters contribute less to the infrastructure of the economy, although they continue to enjoy its benefits.
“It is a big problem for the economy, because it took decades and centuries to create a broader business and economic infrastructure that supports a model of working face to face with colleagues. If you do not need a large part of the assets, the economic disability it will only get deeper. Working from home allows you to save directly by forgoing part of the costs, such as trips to work, lunch, clothes. And where else are the indirect savings by forgoing socialization and other costs that are would be incurred if an employee worked in an office …
And all of this generally outweighs costs, primarily due to the added psychological stress of combining work with childcare and applying in far-from-ideal family office conditions. However, these costs often fade in comparison to the benefits. That’s why the vast majority of telecommuters would like to continue working from home for at least part of the day after the pandemic, ”explains Deutche Bank analyst Luke Templeman.
How would such a tax work?
According to the study, firstly, this tax would not apply when the government recommends that people work from home (of course, the self-employed and low-income workers may be exempt).
The employer would pay the tax itself if it did not provide the employee with a permanent job. If you provide it and the employee still chooses to work from home, the employee would pay a tax on their wages for each day that they would work from home. This work model could be reconciled by coordinating the technology and mobility systems within the company.
Tax rate
Those who can work from home tend to earn above-average income. Yes, let’s say, the average salary of a person who decides to work from home in the United States is $ 55,000, five percent. the fee will be just over $ 10 per business day.
“It’s about what an office worker can spend on commutes, lunches, etc.,” writes L Templeman.
The study goes on to say that if we applied the same rate to UK workers who work from home and have an average wage of £ 35,000, they would have to pay just under £ 7 a day.
For a domestic worker in Germany, a salary of € 40,000 is just over € 7.50 a day. Such a tax would ensure that neither companies nor employees suffer as a consequence. In fact, businesses can benefit from this too, as the reduction in used office space will more than cover the fee for working from home.
How much money would be raised with such a tax?
In particular, the study examines the United States as an example. Of the 104 million. half of full-time Americans worked from home during the pandemic – 5.4 percent. more than before the pandemic. Of that additional 45 percent, according to our study, three-quarters would like to work part-time from home and after a pandemic; 16 percent would like to work from home one day a week, 33 percent. – two days a week, 19 percent. – three days a week, 4 percent. four days and 4 percent. five days.
Altogether, a pandemic could cost $ 4.2 billion a year. new days of work from home. Taking into account the 394 days of full and part-time employees who are already working from home and not self-employed, 4.6 billion are generated per year. Work from home. As an example, taking a median salary of $ 55,000 and a rate of 5 percent, $ 48 billion would be collected from home tax work. USD per year.
Similar calculations can be made in the UK and Germany, at € 6.9 billion respectively. pounds and 15.9 billion. euros.
How could governments use these funds?
In the United States of 48 billion. $ 1,500 of the money raised could go toward a $ 1,500 grant of $ 29 million. Workers who cannot work from home and earn less than $ 30,000 a year (excluding those who receive tips). Many of these people have taken health risks while working during a pandemic and are much more “important” than their wages.
The situation is similar in Germany: here 15.9 billion. The money raised could cost a grant of up to 12% of the money raised. population with a standard of living equivalent to € 12,600 (adjusted to the size of their household).
In the UK 6.9 billion. The funds raised could be covered by a £ 2,000 grant of 12%. people over 25 years of age who work for the minimum wage.
“Some are strongly opposed to such a tax. They argue that participation in an economic activity is a personal choice and should not be penalized for such a decision. However, these people should remember that governments always adjust taxes according to the social environment. .
Let’s take a brief look at historical times: when it was socially unacceptable in the UK to introduce an income tax, the government introduced the so-called ‘window tax’. With new winds, the “window tax” was abolished and finally an income tax was introduced. A similar trend can be seen in today’s society: As we move toward the so-called “people disconnect,” our tax system must keep up.
And the best part is that the WFH tax doesn’t just subsidize companies that don’t have a long-term future. If, for example, a sandwich company in the city center becomes obsolete, the government no longer sees any sense in supporting the business in the medium term. But it makes sense for her to support that mass of people who have been suddenly and involuntarily expelled from the job market. Many will have to choose a low-paying job, retrain, or rethink their next steps on the road to life. From a personal and financial point of view, it makes sense to reach out to people. In addition to recognizing key professions that are exposed to the dangers of COVID by low wages. Those who are lucky enough to find themselves in a position where they can ‘disconnect’: from the tête-à-tête relationship with the economy, they are indebted to them, “writes author L. Templeman in the study.
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