Deutsche Bank Proposes Tax on Working from Home

November 13, 2020

Anticipating a significant shift toward working from home after the pandemic, Deutsche Bank researchers proposed taxing employees five percent of their salary if they opt to work from home.  The levy would subsidize lower-income workers who cannot do the same.

Only 5.4% of U.S. workers worked from home before the pandemic.  Now, 50% of U.S. workers have worked from home.  Relying on survey data of worker preferences, Deutsche Bank projects that the workforce will not return to pre-pandemic levels.  “Our survey shows that three quarters want to work from home to some degree post-Covid with 16% wanting one day a week, 33% two days, 19% three days, 4% four days, and 4% five days."

The problem: “Remote workers are contributing less to the infrastructure of the economy whilst still receiving its benefits... If a great swathe of assets lie redundant, the economic malaise will be extended.”  The report notes “WFH offers direct financial savings on expenses such as travel, lunch, clothes, and cleaning.  Add to these the indirect savings via forgone socializing expenses," etc.

The proposed tax would only apply outside the times when the government advises people to work from home, and would be paid by the employer if it does not provide a worker with a permanent desk.  Otherwise, if an employee chooses to work from home, he or she will pay the tax out of their salary for each day they work from home. 

Making ends meet: “In the U.S., the $48 billion raised could pay for a $1,500 grant to the 29 million workers who cannot work from home and earn under $30,000 a year (excluding those who earn tips).  Many of these people are those who assumed the health risks of working during the pandemic and are far more ‘essential’ than their wage level suggests.” 

Outlook:  There is little doubt the pandemic has reshuffled several work norms, including working from home.  Expect to see additional outside the box (or, as Deutsche Bank appropriately calls them, “radical”) proposals on ways to restructure our workplace policies.