After the pandemic is over, more than half of workers say they want to make their newfound work-from-home arrangements at least partly permanent.
This is seemingly good news: Companies can save money on unnecessary office space, commutes are slashed, and employees have greater flexibility. Instead of facing a choice between raising their children or prioritizing their careers, moms have an option that more easily allows them to juggle both. Currently, an estimated 43% of women in the U.S. leave their jobs after having children. With more remote work options, that statistic could plummet.
But Deutsche Bank wants punish workers for acting on this “privilege.” In a new report, the German bank says people who continue to work-from-home after the pandemic should face a special 5% tax. As if punishing workers for their work arrangement isn’t intrusive enough, the proposal gets worse: Deutsche Bank wants to use the tax collected to subsidize the incomes of the “millions” of workers who cannot work from home and make less than $30,000 a year. Remote workers “owe it” to them, Deutsche Bank writes.
Deutsche Bank argues that a 5% work-from-home tax could raise an estimated $48 billion. That money could then be redistributed to “the 29 million workers who cannot work from home and earn under $30,000 a year.” Each person would receive a $1,500 “grant.”
By example, Deutsche Bank assumed “the average salary of a person who chooses to work from home in the U.S. is $55,000.”
A tax of 5% works out to just over $10 per working day. That is roughly the amount an office worker might spend on commuting, lunch, and laundry etc.
Fifty-five thousand dollars is $13,000 below the nation’s median income last year. This leaves millions of middle-class workers subject to a brand-new, 5% income tax.
This proposal is a gross intrusion into private commerce and a blatant form of redistribution. It’s stealing cash directly from one person and handing it to another person who didn’t earn it. But according to Deutsche Bank:
The sudden shift to [work from home] means that, for the first time in history, 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 as it has taken decades and centuries to build up the wider business and economic infrastructure that supports face-to-face working. If a great swathe of assets lie redundant, the economic malaise will be extended.
This argument makes the false assumption that remote workers will disconnect from the economies and communities where they work. This might be true during a global pandemic, but in normal times, it’s grossly mistaken.
In addition to the many benefits remote work affords companies, workers, and the environment, it also offers local economies and struggling small towns an opportunity to rebuild. Instead of grabbing lunch at the chain restaurant that can afford New York City rent, remote workers can frequent their local sandwich shop. In lieu of spending hours on a long commute, remote workers can spend more time with family, friends and their church.
While remote work can be socially isolating, it also opens the door for more meaningful interactions with local communities and economies. The benefits of these engagements can’t all be measured with money, which is probably why they’re so easy for Deutsche Bank to miss.
The prospect of more work-from-home options is one of the silver linings of the Covid pandemic. Instead of proposals that would make it less desirable, policy makers should focus on ways to make it more obtainable. And instead of putting out virtue-signaling prescriptions that would impose a massive new tax on middle-income earners, Deutsche Bank should tend to its own house.