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Deutsche Bank floats idea of a 5% tax for people who work from home

It goes down like a lead balloon

BY RICKY BROWNE

As the pandemic hits employees around the world, forcing many of them to work from home (WFH) — sometimes at reduced salary — Deutsche Bank has come up with the idea of taxing those people extra for the privilege of having a job and being able to feed their families.

“People who can WFH and disconnect themselves from face-to-face society have gained many benefits during the pandemic,” notes a new report from Deutsche Bank.

” A five per cent tax for each WFH day would leave the average person no worse off than if they worked in the office,” the report says.

The Deutsche Bank report on a WFH tax came with this illustration

The report has an illustration which shows two people working from home — a shoeless, lockdown-bearded man casually lounging in an armchair and working on a laptop (or doing a Toobin?), with a woman working on a desk top near by, with her pet cat resting at one arm’s length and a steaming cup of coffee at the other. What could be more relaxing?

“For years we have needed a tax on remote workers – covid has just made it obvious. Quite simply, our economic system is not set up to cope with people who can disconnect themselves from face-to-face society. Those who can WFH receive direct and indirect financial benefits and they should be taxed in order to smooth the transition process for those who have been suddenly displaced,” reasons the report titled What we must do to rebuild.

“The popularity of WFH was growing even before the pandemic. Between 2005 and 2018, internet technology fuelled a 173 percent increase in the number of Americans who regularly worked from home,” the report said, as if this was an alarming development.

The Deutsche Bank towers in Frankfurt, Germany

Well, maybe not that alarming, as the report noted: “It is true that the overall proportion of people working from home before the pandemic was still small, at 5.4 per cent based on census data, but the growth was still way ahead of the growth in the overall workforce.”

Covid has turbocharged that growth, the report says, as during the pandemic, the proportion of British citizens who worked from home increased seven-fold to 47 percent, while in the United States that number increased ten-fold to 56 percent. It is expected that many of those people will continue to work from home even after the pandemic has passed.

In fact, two-thirds of organisations say that at least 74 percent of their employees can work from home effectively, according to S&P Global Markets.

But not only that, despite all the disadvantages from working at home –according to a Deutsche Bank survey — more than half of the employees currently working from home would like to continue that permanently for between two and three days per week.

WFM employees are currently benefitting by not having to pay for transport, business attire or lunch or dry cleaning, and therefore would not be out of pocket with a five per cent tax, Deutsche Bank believes.

Thumbs up for the proposed WFH tax? (Photo: Tumisu)

And there are even greater benefits to WFH. These include “the indirect savings via forgone socialising and other expenses that would have been incurred had a worker been in the office. Then there are the intangible
benefits of working from home, such as greater job security, convenience, and flexibility. There is also the benefit of additional safety,” according to Deutsche Bank.

The bank says that the daily tax could raise £6.9 billion in the UK per year, and up to US$24 billion in the US.

The money earned from this tax would go towards paying extra to those unfortunate workers who have to go into the office each day. In the UK that money could go to workers who earn the minimum wage with an annual £2,000 grant.

Remote workers are contributing less to the infrastructure of the economy whilst still receiving its benefits, Deutsche Bank contends.

“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,” Deutsche Bank said.

Keep that sanitizer to hand (Photo: Junjira Konsang)

NOT WELCOMED WITH OPEN ARMS

So who could complain about such a great idea?

Quite a lot of people it turns out. Deutsche Bank was trending on Twitter today, and a casual glance at many of the comments would suggest that the idea has gone down like a lead balloon.

Some pointed out that as home workers, they still contribute to the economy, whether or not they eat lunch at Pret-a-Manger.

All this WFH malarky isn’t doing Pret much good. WTF?

“As someone who has worked from home for 6+ years now, I can confirm that I do in fact still contribute to the economy. Shockingly, I still need to eat lunch, but my contribution doesn’t go to a city-centre Pret, it goes to my local independent sandwich shop,” said Jess Lawrence in a tweet that got 1500 likes and 157 retweets.

In fact Pret was also trending on Twitter in the UK with some 13,000 tweets and counting.

“You are nothing more than a unit of production to be farmed for tax and consume overpriced Pret sandwiches. Remember that,” tweeted Minitrue@banthebbc.

The advantage that WFH has on the climate was one area of attack.

“What fresh hell is this?” tweeted James Murray, editor of Business Green. “We’ve stumbled across something that actually helps tackle air pollution, emissions, and work-life balance for millions, so let’s tax it…” he said, in a tweet that got 1300 likes.

Others questioned what right Deutsche Bank has to make such a recommendation, questioning their own ethics.

“Deutsche Bank’s report?? And how much more tax should Deutsche Bank pay for facilitating large-scale money laundering?” tweeted Hideous Shambles@Phlegm47.

The Deutsche Bank towers

The irony of the situation didn’t esccape others.

“Deutsche Bank talking about Privilege is the most ironic thing I’ve seen in a while,” tweeted Patrick Bateman.

Others suggested that Deutsche Bank could afford to pay the tax instead.

“The average cost of keeping an employee in an office is around £10k a year in London. Working from home saves companies like Deutsche Bank a ton of dosh. How about we increase tax on them instead?” asked Matt Graham in a tweet.

“How about we just levy Deutsche Bank and every other bank while we’re at it instead?” asked Client Journalism Expert@ClientJournoExp.

Others seemed to lose their zen over the suggestion of a five percent tax for WFH employeesi, including one Dai Lama.

“Some feedback on this, if I may: Shove this idea right up your hole. Sideways,” said DaiLama@WelshDalaiLama — presumably not connected to the one from Tibet.

Others took a similar approach.

“My employer offers home employment. Their stated reason is it *saves them overhead* I pay the internet. I pay the electric. I pay the mortgage. Tell money laundering Deutsche Bank to shove it up their collective fannies,” tweeted Chey Pax@CheyenneDancer.

A headshot of Luke Templeman, Deutxhe Bank strategist behind the report. (Photo: Deutsche Bank)

Indeed, Deutsche Bank strategist Luke Templeman, the writer behind the report received quite a bit of negative feedback himself.

“A lot of people aren’t impressed at the idea of another tax, however, some have seen it as an interesting policy that governments can use to redistribute some of the gains from the pandemic which have been unexpectedly accrued by some people while others have lost out,” Templeman said.

Some of the feedback was directly to Templeton.

“Read the logic of this. There isn’t one. You are just a unit of potential tax to be squeezed. Apparently, you scum, you are not buying enough sandwiches and work clothes from home. Deutsche Bank strategist Luke Templeman: go boil you head,” tweeted Dr Martin Character Matters@MartinRemains.

But despite the reaction from the Twitterverse, national governments may take to the idea, as they ponder how they will ever reduce the trillions of dollars of debt that has been created by the pandemic crisis.

While recently elected governments, such as in the United States, could conceivably bring in some version of the tax as they won’t have to face the wrath of the voter for some time. Others that may be moving closer to an election date may want to hold off. And yet others that don’t have to worry about troublesome elections may just dive right in.

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