Posted on 12/15/2020 1:03:08 PM PST by Red Badger
A new report estimated the US government could raise $48 billion a year by taxing remote work. But is making remote work more expensive a good idea?
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ver since the beginning of the pandemic, working from home is the new normal.
In 2018, just 5.4 percent of the US's working population worked remotely. By mid-2020, it had turned into reality for 56 percent of the workforce. While not all workers forced to stay home were quick to welcome the change, many learned to enjoy it over time. With state governments beginning another round of lockdowns, it isn’t shocking to see many companies choosing to carry on with remote work.
In early November, however, Deutsche Bank announced that working from home was a privilege and one that should not be taken lightly. According to the bank's assessment, remote workers don’t contribute enough and must be dealt with accordingly. While their report failed to back these claims with real data, lackadaisical assumptions regarding remote work were far from the only bad idea spewed by the scandal-ridden bank.
Deutsche Bank’s thematic strategist Luke Templeman estimated that the US could raise an average of $48 billion a year by taxing remote workers.
Instead of simply encouraging companies to lure workers back to the office on their own accord, the multinational conglomerate decided to propose a new tax. Pay up or go back to the cubicle, they advise. But would it work? Scapegoating Remote Workers
Research carried out by the German multinational investment bank found that more than half of workers wanted to continue to work from home after the pandemic.
Noticing that remote workers have higher incomes than the average worker, the bank concluded that if some are allowed to work from home and spend less on gas, eating out, and other work-related expenses, charging them a 5 percent tax wouldn’t be such a bad idea. Indeed, Deutsche Bank’s thematic strategist Luke Templeman announced, remote working taxes had been needed for years — “Covid has just made it obvious.”
If workers and employers choose to continue with the system, Templeman said, a post-pandemic tax should be put in place “in order to smooth the transition process for those who have suddenly been displaced” in the pandemic-fueled crisis.
Making it harder to work from home puts many workers in a difficult position, particularly women.
In other words, those whose professional contributions can be carried out completely or at least partially from their home offices must pay for the damage caused by lockdowns.
Adding that the taxes could be used to help people who were struggling, Templeman estimated that the US could raise an average of $48 billion a year by taxing remote workers. That would be enough to pay for $1,500 grants for 29 million workers who make less than $30,000 a year.
But where does he propose the money come from? Wrong Incentives
Employers are overwhelmed as it is thanks to the lockdowns. Many are hanging by a thread, having to lay off a number of employees just to stay afloat, and yet, Deutsche Bank wants them to pay up.
“The tax will only apply outside the times when the government advises people to work from home,” Templeman explained in his report. And whereas those who are self-employed or who have low incomes wouldn’t be taxed, those with high incomes would. Instead of charging the actual workers, Templeman envisioned a system that would force employers to foot the bill. Unless, of course, workers insist on staying home:
“The tax itself will be paid by the employer if it does not provide a worker with a permanent desk. If it does, and the staff member chooses to work from home, the employee will pay the tax out of their salary for each day they work from home. This can be audited by coordinating with company travel and technology systems.”
To Deutsche Bank, that may sound easy enough. After all, a large investment bank has plenty of money and it can implement these policies without much ado. Smaller companies, however, aren’t so lucky. What’s worse, this type of penalty would not only hurt smaller firms, it would hurt the women who sustain them, explained Rev. Ben Johnson of the Acton Institute.
“The government has no compelling interest in punishing telecommuters or funding brick-and-mortar employees,” Johnson wrote.
But making it harder to work from home puts many workers in a difficult position, particularly women.
Women are more likely to prefer flexible schedules and work arrangements to better accommodate their family’s needs. If women are more likely to prefer such arrangements and a new tax is imposed, asking employers to continue working from home becomes a difficult decision.
As explained by Johnson, “working from home, without paying $10 a day for the ‘privilege,’ gives employers another tool to empower female employees.” Resist the Envy
While it is easy to claim that the work-from-home tax could benefit the unemployed, what this tax would create instead would be nothing but a wealth transfer promoted and enforced by the government. In addition, it would do nothing to alleviate the pain of the under or unemployed.
A handout designed to benefit low-wage workers will actually cause more harm as employers might simply slash their wages once they realize the government is sending them checks.
Furthermore, encouraging this type of thinking through public policy is dangerous. It encourages envy by telling the working poor they should resent the wealthier for their prosperity and teaches Americans they have the right to rally against their neighbors for problems rooted in government action alone.
Why set ourselves up for failure by further dividing Americans in such a delicate time as this?
LOL. Since when is anything the govt does a “good idea”? When did the govt ever hesitate to implement a bad idea?
“I see you have some money there. Give it to me.”
Excellent summary.
So then, these analyst types are saying that, in normal times, employees pay gas taxes, spend money eating out, and have other work related expenses which generate tax revenue.
That tax revenue is not generated if people work from home.
So then, because there is a reduction in tax revenue when people work from home instead of at the office, they need work from home employees to pay a different tax, to make up for taxes they no longer are paying.
Does this make sense to anyone? Am I missing something?
You’re not missing anything, the entire article is about people smoking drugs. At least that would make sense. The article doesn’t.
It’s a philosophical problem.
Big government exerts ownership of everything and the ability to decide how much of that we get....
I'm good with this, as long as the government pays me back the 5% for saving the planet by not driving as much and my employer pays me another 5% for reducing their office space costs.
You ain't seen nothing yet.
They destroyed the livelihoods of millions of people as "non-essential" while government school teachers stayed home and got paid for nothing.
Now there will need to be an increase in property taxes to keep them in the manner to which they have become accustomed.
Public schools have defined themselves as non-essential without realizing it.
Time to abolish them.
Deutsche Bank’s thematic strategist Luke Templeman estimated that the US could raise an average of $48 billion a year by taxing remote workers.
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This is the Davos pinhead academic type who never had to work a real job in his life.
Liberals need to think about the long-term effect. Do you want more affordable housing in urban areas or not? Do you want reduced traffic congestion or not?
Germans hate the idea of people working from home. They want to be able to stare at you, and watch your every move. Control freak nation.
BUT essential workers who could not stay in the comfort of their homes paid dearly for getting the exact same wage....childcare costs, costs for transportation, etc....
its the people who actually HAD to work that should get a tax holiday for the months of March thru now at least....
If you are physically present in a city, the city takes a piece of your earnings. If you stay at home, they want it anyway.
This is socialism. It taxes the very thing that makes this country prosperous. Productivity. So you get less of it, and more freeloaders. Keep it up and you’re the soviet union or venezuela.
This is just like when the water company spent years raising rates on water when demand was high claiming they had to invest and pay to keep up the supply, but then raised rates on water when usage goes down because they had to make up for a drop in revenue.
They want to tax remote learning because they know it will lead to a major loss in revenue in many areas, such as gas taxes, property tax for businesses that need less brick and mortar footprint, and even a change in where local income taxes are collected for individual workers.
The so-called services that any government provides are an excuse to collect taxes. Taxes are NOT a means to provide services though.
My IT job has been remote since the day I took it in 2018. We both save money doing it this way. I took a small pay cut for the flexibility of living anywhere in the U.S.A. with a solid Internet connection.
There is no basis to tax such an arrangement.
remote employment (not learning)
“...if some are allowed to work from home and spend less on gas, eating out, and other work-related expenses, charging them a 5 percent tax wouldn’t be such a bad idea.”
This is the mentality that suggests that manufacturing companies should be taxed for every robot that they use in lieu of human employees. That’s right, employers should pay payroll tax for robots because the $#@$@ government needs more money.
Tax the bots. Tax the bots. Tax the bots, I say!!!
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