Deutsche Bank is wrong: why we shouldn’t tax home workers

Deutsche Bank Research is suggesting that a 5% salary tax should be considered for those working from home, so that the money can go towards those that cannot and are struggling as a result.

Which, on the face of it, seems a fair distribution of money. Except the argument is deeply flawed.

Let me explain.

What’s the money for?

The idea is that those who work from home, and not because they’ve been forced to by any current emergency, would pay this money so that it could be put towards those on low income and are in dire straights.

To all intents and purposes the goals of where the money is to go is good.

How long should this go on for?

At first, it seems this is to help during the current pandemic period, but when a successful vaccine is already being talked about, this does sound like it’s pretty late in the day. Of course, it’s not – the current situation is an excuse to start it, but they have longer term ambitions…

It also wouldn’t apply when people are asked to stay home for a public health emergency or other medical reasons.

The tax revenues would be used for a very specific purpose – to give grants to the millions of workers who cannot do their jobs from home and who make less than $30,000 a year.

In other words, this is a suggestion of an on-going tax. Not just during the current pandemic.

So, why is this wrong?

There are a number of issues at play here.

1. It will force people back into the office

People have started working from home and many have seen the benefits, with improvements in a work/life balance and their mental and physical health. The biggest benefactor, though, surely has to be the environment, with less commuting.

Slapping a 5% tax on these people, making many consider whether working from home is worth it, is surely going to change minds? Is this what we want?

2. The research makes false assumptions about home working

Those who work from home are saving money and not paying into the system like those who go out to work.

They are making the fundamental error that working from home means that you (and/or your business) are saving money by doing so. Let’s break this down..

Your benefits

That commute, eh? You don’t have to do that. Well, unless you’re one of the millions who cycle or walk to work, I guess.

And, other savings?

Costs, though? You have to heat your house a lot more. Use your own electricity. I bet, working from home, you’ve found yourself buying more things for the house to make your little office better – all those things that your company won’t pay for?

And silly arguments about not “eating out at restaurants near their places of work” don’t help. People working from home still eat – they go out. It just may not be the Nando’s around the corner from the office. Things shift. Local shops and supermarkets have seen a huge uptick in sales since the pandemic due to people moving their buying habits elsewhere.

Your business’ benefits

If you’re going to be working from home longer term, your company will need to be giving you a proper office set-up – chair, desk, monitor, etc. I’m guessing it won’t be a bulk-bought desk, as you’d have had in the office, though, so that’s probably going to be pricier.

What if only some staff start working from home? Well, they can downsize the office. But that’s not a quick or, often, easy thing to do. Until then, you’ll be heating and providing facilities to a half-empty office.

But, here’s the thing, and I’ve argued this for years….

If a company saves money by having people working from home, they’re doing it wrong.

If people work from home, you need to take the money saved by not having an office/such a big office and plough it back into what those workers will now be missing – the social aspects of office work. That money needs to be spent on regular meetups (once pandemics are out of the way) and social events.

3. What have home workers done wrong?

Many people, myself included, have worked from home for years and this has never been an issue before. Suddenly, now, we’re leachers on the economy now that the pandemic has seen many businesses see the benefits of it.

Yet, targeting a set group of people who haven’t done anything wrong, aren’t paid any more than another group (those who are working in an office) and charging them an extra tax, that no-one else has to, seems oddly wrong.

Company directors are routinely sat in board rooms, coming up with ways for the business to avoid tax legally but the real economic blight is apparently those who work from home.

My wrap-up

So, a tax for those daring to consider working from home because, you know, it’s best for their work/life balance and health. And because it’s believed that they’ll be moving from one lunchtime food outlet to another. And not belch fumes into the air during a traffic-jam-filled commute.

Yep, sounds like something we need to stop.

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