Those working from home during the Covid-19 pandemic need to pay a tax to subsidize those who can’t, as well as fund the infrastructure lying idle, a Deutsche Bank researcher has proposed as part of a recovery strategy.
“For years we have needed a tax on remote workers – [Covid-19] has just made it obvious,” wrote Luke Templeman, a London-based ‘Macro Strategist’ for Deutsche Bank, in the November 2020 issue of the bank’s research publication Konzept.
Templeman’s argument is that people working from home save on lunch, commuting and travel, cleaning and “socializing” at the office, thereby not contributing to the expensive infrastructure built over the decades to support “face-to-face working” while benefiting from it. Letting these assets rot will extend the “economic malaise,” he argues.
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As a solution, he proposes a five percent tax, to be paid either by the employer if they don’t provide a “permanent desk,” or the employee if they choose to work from home instead. How would this convoluted arrangement be enforced? Simple: by audits “coordinating with company travel and technology systems.”
He also argues that those “lucky enough to be in a position to ‘disconnect’ themselves from the face-to-face economy owe it to” essential, low-wage workers who don’t have that choice and risk coronavirus infections by showing up to work.
The approximately $48 billion raised by his tax in the US could go towards subsidizing their pay, or putting them on the dole while all the “infrastructure” built to serve office workers shuts down permanently, which seems more likely.
While claiming that workers will hardly feel the tax, which his back-of-the-envelope math suggests would amount to $10 a day, Templeman notes that companies may actually find it more profitable, since they would save a lot more from downsizing their office space.
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What happens to that office space, he answers in another essay in Konzept, urging the relaxation of zoning rules to enable people to live in downtowns and work from home. While this may lead to “hodgepodge” cities and the demise of post-WWII urban planning, he argues “change has been needed for some time and the pandemic is the perfect opportunity for central government to take charge and overhaul our approach to city building.”
Templeman brushes off concerns about government interference in economic choices, bringing up the UK ‘widow tax’ that served in lieu of income tax until one could be imposed, to argue that “governments have always backsolved taxes to suit the social environment.”
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