People Who Work From Home After Pandemic Should Pay More Tax, Says Report
Economists from the renowned Deutsche Bank have put forth a proposal forcing staff to pay 5 percent tax for each day they work from home or remotely.
COVID-19 pandemic has pushed us all to work from home. Some love it, some loathe it and some are desperately waiting for things to go back to normal.
However, several companies around the world have announced that even with COVID-19 going away from the world, they would allow employees to work from home.
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This surely made people who love working from home really happy. However, now a new report states that people who work from home after the end of the pandemic should be taxed for getting this privilege.
Economists from the renowned Deutsche Bank have put forth a proposal forcing staff to pay 5 percent tax for each day they work from home or remotely. They argue the fact that since the employee isn¡¯t stepping out to work he is saving money that he¡¯d normally spend on commuting, or buying lunch outside etc.
According to the bank's economic research unit, a tax like this could allow the raising of $49 billion a year in the US, ?7 billion in the UK and €20billion Germany. They say these funds could be applied to fund subsidies for workers earning lower wages who don¡¯t have the option of working from home.
Jim Reid, global head of fundamental credit strategy and thematic research at Deutsche Bank explains, ¡°Working from home will be part of the ¡®new normal¡¯ well after the pandemic has passed. 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.¡±
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Deutsche Bank strategist Luke Templeman says that the need for a tax on remote workers was in need for years and the pandemic has just made it more obvious, ¡°A big chunk of people have disconnected themselves from the face-to-face world yet are still leading a full economic life. That means remote workers are contributing less to the infrastructure of the economy whilst still receiving its benefits. That is a big problem for the economy.¡±
According to his calculations, a daily tax of 5 percent for someone working from home would cost someone earning ?35,000 roughly ?7 a day, which doesn¡¯t seem like a lot, however, the amount accumulated due to this in the UK could help in providing a grant of ?2000 to the 12 percent of people in the nation over 25 years of age who are earning minimum wage.
But does this even make sense?
Such a claim might seem preposterous to many of us who are currently working from home since people who aren¡¯t stepping out of their homes for work are still incurring costs -- whether it¡¯s through electricity they¡¯re spending staying at home every day, a better internet plan at home or office stationery that they might need. Since people are working at home, they don¡¯t have time to cook meals, so they¡¯ll still end up ordering from out, and how can one disregard the extra hours people are pulling while working from home -- the experience might seem like a convenient but it all comes at a price. So charging more tax on this surely seems odd.
What about people who don¡¯t have an option to work from home?
While one can argue that there are some people who don¡¯t have the option for working from home and this would somehow help them -- people like housekeeping staff or staff in public transport services -- they won¡¯t be really missing out.
Even though people won¡¯t commute to work doesn¡¯t mean people won¡¯t travel at all -- they¡¯ll still go out to hang out with friends or families and dining or watching movies will still be something people would want to experience. Some people will choose to work from offices for better productivity or staying in the ¡®work-zone¡¯ so, in my opinion, it doesn¡¯t feel that the work of those people would be impacted.
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If anything, it¡¯ll be better for the environment as it¡¯ll result in fewer traffic jams, pollution and getting more work done rather than wasting time in commute.
Even though this is something that is worth a debate in the next Zoom call you have with your friends, people in India still don¡¯t need to worry about something like this, since this is with accordance to developed economies like the US, UK, Germany and others, where people religiously pay their taxes. In India, only 1 percent of our population religiously pays taxes, so applying something like this here would be far more tricky and complicated.
