Tax working from home, says Deutsche Bank, because the economy needs that lunch money you’re not spending

Taxes change all the time, but shifts in behaviour are usually slower than the rush to WfH

Deutsche bank has proposed governments impose a tax on working from home.

The bank floated the idea in Konzept, a publication it describes as “a research magazine published at regular intervals that addresses the fundamental issues driving the world of economics and finance.”

A new issue of Konzeptpublished this week considers “What we must do to rebuild” and suggests the work-from-home tax as one useful measure.

“Quite simply, our economic system is not set up to cope with people who can disconnect themselves from face-to-face society,” the bank’s “Macro strategist” Luke Templeman wrote [PDF]. He therefore suggested that those who continue to work from home during or after the pandemic indirectly fund efforts to help those whose jobs they inadvertently destroy, because most of them have cut personal costs as a result of not having to pay for clothes, lunches, transport and even after-work drinks.

If a city-centre sandwich shop is no longer needed, it does not make sense for the government to support the business in the medium term

“The sudden shift to WFH 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,” Templeman wrote. “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.”

Templeman proposed that the tax only kick in at times when governments are no longer advising working from home as a pandemic-prevention measure. But once the all-clear is sounded, he wants employers that don’t provide desks to pay up, or employees that choose to keep working from home to foot the bill.

He wants the tax to be levied at five percent of a worker’s salary and calculates that comes to about $10 a day.

What to do with the money raised? Templeman advocated using it to help those whose jobs are destroyed by the pandemic.

“If, for example, a city-centre sandwich shop is no longer needed, it does not make sense for the government to support the business in the medium term,” he wrote. “But it does make sense to support the mass of people who have been suddenly displaced by forces outside their control.”

And Templeman reckons the tax could raise enough to make a difference for the displaced.

His calculations found that the US, Great Britain and Germany would raise annual sums of $48bn, of £6.9bn and €15.9bn respectively.

The proposal did not go down well in The Register’s distributed office, with one staffer saying “I'm not working from home, I’m living at work.”

Anticipating such opposition, Templeman argued that the tax is just an example of governments moving with the times.

“Some will argue against the tax,” he wrote. “They will say that engagement with the economy is a personal choice and they should not be penalised for making that decision. Yet, these people should remember that governments have always backsolved taxes to suit the social environment.”

“Consider that in centuries past, when it was socially unpalatable in the UK to introduce an income tax, the government implemented a window tax. As society changed, the window tax was abolished and, eventually, an income tax was introduced.”

“In the same way, as our current society moves towards a state of ‘human disconnection’, our tax system must move with it.” ®