Deutsche Bank's (DB) new research suggests that remote workers should be taxed for the "privilege" of working from home!
Why should remote workers be taxed?
According to DB,
- Those who work from home are getting a free ride. They are contributing less to the infrastructure of the economy while still receiving its benefits.
- WFH = savings in terms of travel, lunch, laundry etc. Plus intangible benefits of greater job security, convenience, flexibility, additional safety.
- So even if there's a 5% "privilege" tax, you would be no worse off than if you had chosen to go into the office.
You are surely joking, DB
The suggestion is so outlandish that it isn't even worth talking about, but humour me.
- Remote workers pay extra for setting up home office, bills for electricity, heater, co-working pass etc.
- Companies save huge costs on office rent, internet & electricity bills among many other things.
So if anyone is paying a "privilege" tax, it should be the employer. However, that would mean discouraging companies from going remote.
How about incentivising companies for environment-friendly behaviour?
Surprisingly, DB doesn't talk about the positive impact on the climate due to remote work at scale. If we assume huge number of people indeed start working remotely, shouldn't the state incentivise (rather than tax) companies for being environment-friendly?
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Top comments (40)
Deutsche's argument is nonsense. It's upside-down. The WFH "privileges" it lists are efficiencies in the market and the supposed contributions to the economy that office employees pay are economic rent.
This is like saying that we should tax computers because they don't contribute to the demand for typewriter ribbons. No kidding! We're not "contributing" to that demand because we don't need them in the same volume that we used to. We need a social safety net to help the makers of typewriter ribbons transition to the jobs we still need or are going to need. We don't need a tax to artificially hold back computers.
Not everything that benefits some people necessarily deprives others.
DO NOT TREAT LIFE ONLY AS A ZERO SUM GAME.
Perfectly put!
Funny how there are a lot of arguments surrounding remote working.
Some say remote workers should be paid more, other say less.
Some say they are privileged, like DB here, and others say they are actually exploited. 🤔
I guess for each person it's different.
There are always 2 sides of the coins. For me nothing beats face to face communication, productivity is 2x better than any form of remote communication including video etc.
While I do agree that remote workers can save the commute time and thus may work longer, I would argue that most team work suffer more or less. So if your work require lots of collaboration, you may see your productivity going down as a whole.
At our company, we have implemented work from home even before the pandemic. However, people are still encouraged to go to the office certain days of the week for meeting, discussion, and training.
Whenever I hear about team collaboration suffering, I wonder how much of that is just a result of it taking time for people to adjust to a different manner of working. I don't mean just individuals adjusting, either; I'm talking about the tools people use, their processes for collaboration, and so on. Corporations have to adjust over time, too.
I suspect that, for many kinds of collaborative work involving intangible work product, remote work will ultimately prove much more efficient and effective, once the technologies, techniques, and work cultures catch up.
There's also the fact that, in an "in person" office work culture as we've had for decades, introverts probably get shunted aside more, and thus don't get jobs as easily, even when they're very competitive workers. As remote work becomes more prevalent, introverts will probably have an easier time getting the same work for the same pay, and they'll contribute to increased work efficiency and effectiveness for remote teams -- which leads to the thing most people don't really talk about:
Different people work better in different environments.
Offices for cases where it makes sense to have a bunch of extraverts get together and collaborate in person would be great to maintain.
Working from home can help bring more work efficiency and effectiveness into the economy by applying the leverage currently lost by systemic biases against introverts who tend to be better at different things.
Remote work of other various sorts can enhance the value of both introverts and extraverts, and have different effects on different types of jobs.
There's a common bias against remote work of almost any kind, apart from stuff like travelling salesmen. Culture needs to overcome this, and crap like DB's recommendation of taxing remote workers is just probably, mostly, just some BS that ultimately arises from that cultural bias. If we want to improve the world, we need to overcome such biases and do what works.
Period/full-stop.
Seems pretty balanced. Glad it's working for you, and that you're not advocating for the imposition of some kind of universal rule.
Whilst my views are somewhat idealist, I am not saying companies should not make a profit. I just find it distasteful that companies can make such large profits, whilst paying their staff so little. I appreciate there's shareholders to pay dividends to, and other investment to make within the business - but when the CEOs get massive bonuses and the people at the bottom struggle to get by (or are made redundant to make extra profit), then I start having issues.
I work in IT, and I used to work for a company involved in IT automation. That naturally leads to conversations about making roles redundant and cost savings. We always pitched it as a chance to move people to a different part of the organisation where they can provide better value. Remove people from smaller, trivial tasks on to things which require more skill and effort.
I also strongly believe that roles which are replaced with automation should have some form of taxation. That should then be used to help fund some form of universal income. As automation becomes more and more prevalent, a lot of people are going to be without work, and fewer roles will be available. Those people will need money from governments to survive. I feel it's only right, ethically, for the companies who have removed the roles for which they are suited, to help pay for those people to actually survive.
I'm not anti-tax. I'm anti-stupid-tax, like taxing people because they choose to work from home, for whatever reason.
It's not that I'm not willing to pay more in taxes. I just don't see why it should be solely for those who work from home. If my company then decided that I must work from home, or makes my desk a "hot desk" so I have no full-time space in the office, I get penalised for their decision.
Your arguments basically add up to arguments for taxing the people who work in offices, too. There's no difference other than facile justifications for picking one over the other that don't actually change what you said about how we just need to pay taxes. Fine, let's apply that to the people in offices, instead of the people working from home.
I think this is hitting a stalemate point. Whilst I haven't read all comments against the post, the ones I have seen haven't come out to say that they don't want to pay any additional tax, they just think it's unfair to be taxed for working from home.
The argument that I should pay more because I don't have to risk infection is like saying Firefighters should pay no tax because they risk their lives every day. Because I am fortunate enough to have a well paid job, I already pay more tax than others on a lower income. Arbitrarily adding an additional 5% burden to my overall tax bill (or others in my situation) might push them to, or over, the edge.
There's no consideration given to people who have dependents who may no longer have jobs because of the pandemic, or are ill as a result of the pandemic. Those people may have increased financial pressure but, despite having the ability to work from home, would still have the tax applied.
We're all living through the pandemic together, so we should be battling the fallout together. A smaller tax increase across the board would allow this. Those who pay more tax will still pay more than those who pay less, but the burden isn't just dumped on a few who aren't allowed to go into the office, or don't need to.
The idea that nobody would work in jobs that require people on the premises is ludicrous. As workers get more scarce, their pay rates will climb based on the need for these services and the scarcity of willing workers. That would increase the number of people willing to do those jobs, because they need (or want) the extra money. In a time of pandemic, it's important to not have more people than are really needed goign out into the world when their jobs don't require it, and those jobs that do need to be outside of the home will see pay rates to balance the importance of the job against the scarcity of workers.
Speaking of economics . . .
The economic effects of taxing people who work from home more than those who don't just because they work from home would include a lot of horrific effects, like ensuring that:
People who could work at home but don't have to would be encouraged to go to the office every day instead, to save that tax money, leading to more interpersonal contact in workplaces and in cities in general, increasing the spread of the disease. This would also increase the danger to the in-office workers, healthcare workers, critical infrastructure workers, and so on.
People who are at higher risk from COVID-19 and don't have much money would be endangered by the choice between not being able to work and going into the world to likely get infected, and as high-risk people would be more likely to die from COVID-19 effects.
Businesses whose workers could otherwise work from home would more likely go out of business, contributing to the financial troubles of their employees and general economic collapse because many businesses would be affected by this tax situation; they would be more likely to experience a widespread outbreak among employees destroying company productivity.
Those are just first three COVID-19 related problems that came to mind, off the top of my head. I'm sure you can imagine others, but even that is ignoring all the non-COVID-19 related reasons such as:
Pollution from commuting would continue to increase, rather than decrease as it should if more and more people worked from home -- because population keeps climbing, resulting in more and more people commuting to and from jobs.
Danger from commuting would continueto increase, rather than decrease as it should if more and more people worked from home -- because the population keeps climbing, resulting in more people commuting to and from jobs. Heavy traffic and people in a rush to get to work or get home causes increasing rates of accidents on highways. Longer term health is also affected by heavy traffic commuting, due to stress, poor eating habits (fewer home cooked meals and more "fast food" eating), and other factors.
Taxing people for working from home is essentially a tax on being an introvert, which is doubly awful considering how much of the world is built around extraverts (because the squeaky wheel gets the grease, as they say).
There are piles of other negative side effects to people individually and to society as a whole that would also apply. This was just off the top of my head, and I could keep going but this is getting too long already. Who's going to want to read this wall of text?
The upshot is that it would affect many people, and many businesses, in pretty profoundly negative ways, and ultimately end up hurting the people who might, supposedly, be helped by the tax money. This kind of taxation always basically just looks like a way to punish people who don't deserve to be punished because someone else envies something about them. Where the usual meaning of "the grass is always greener on the other side of the fence" is that people want to be in another person's shoes because they don't recognize the downsides, I think that kind of envy usually turns into outright jealousy with a meaning of people wanting to burn the grass on the other side of the fence, thus depriving the "luckier" people of the positives of their lives out of spite.
The real solution is to let people work from home or in an office as they prefer (when all else is equal), so that introverts and people who have other reasons to stay home (very tight budgetary constraints or those who are at more significant health risk, for instance) are no longer being penalized by society being so heavily weighted to support the preferences of extraverts, and everyone can just have the working environments they prefer.
I think your point is rather orthogonal to the point of the post.
You're talking about subsidizing certain parts of our society because they are important. And I completely agree with that. But where that money would come from is a different matter, and getting it directly from WFH is just one of many options.
What the post above discusses is: should a given amount of economic effort be taxed the same, more or less depending on whether it's done from home or at a place of work. That economic effort could indeed be things like software development, but could just as well include the 'important stuff' I referred to above.
My point is if you want country to shine you must take part in it. If you complain about taxes avoid Nordics. I moved to Sweden to pay taxes so I know they have at least some purpose in contrast to my country where I had bigger standard being a software developer but people couldn't affored basic life necessities with their pensions. Think companies shoud pay more taxes? We'll if my client tried it they would fire more people than they did since they wouldn't have money so in result less people work less tax incom for country more social cases. It always starts with you as a person not x,y, or z. No one has to agree with this one but that's why you try to move to a country that suits your needs. I avoided US because I think it's too capitalist and only money focused.
Not gonna disagree with you, there. And it's lead to a lot of corruption, both in the private and public sectors. I often feel like too many guys took that "Greed is Good." line from Gordon Gekko in "Wall Street" a little too far.
But I just think we should have a care about what we're setting up as an alternative to the "Greed is Good" mantra. "Privilege is Bad" doesn't seem so great, either, to me. And it seems some people, especially Activist "Scholars," are a little too eager to jockey for that influential position of deciding who's got the "Privilege" and who's the "Disadvantaged Groups."
I'm not a philosoher I'm a simple man so I don't think too much. You can help by giving more. Do it or reject it. Vote it out if required but I don't buy those long explenations about how it's hidden agenda or not well planned or so. I look at what's happening here in nordics and elswhere. They also have problems it's not perfect of course. And it looks like they're leaning more and more towards hard capitalism because a lot of people got to confortable not worrying. But comparing it to others I'll pay my dues to keep the system running as long as possible. You either defend your income or you don't belive it will be properly regulated, in other words, you don't trust your goverment if you need to fight this. I belive if it was introduced in nordics, Germany, Singapore, South Korea, Japan and such it would be good enough. Reason is that these countries are not to much in the headlines fot coruption.
Yeah. Ya can't trust most of the "-isms."
These buzz-words of "privileged groups" and "exploited groups" strike me as characteristic of the new Marxists.
Why do so many popular issues get shoe-horned into this oppressor-oppressed class conflict ideology? It's flawed, because it doesn't account for individual agency, perhaps by design.
The logic is that if you have a privilege, you should have a tax, right? Am I missing something?
A privilege tax for using free software, because those with "FOSS-Privilege" don't contribute nearly as many billions of dollars back to the Operating System subfield of the software development industry?
A Privilege Tax for people who move closer to their work so they only have to walk?
A Privilege Tax for male privilege, or high-functioning autism privilege?
A Privilege Tax for those with a high IQ?
These things are un-earned, but the benefits accorded by them do take a modicum of effort to preserve and seize.
Privilege ==> Punishment is the calculus of the likes of Harrison Bergeron. It's a quick read, and Vonnegut's as good an author as any.
> Hominem unius libri timeo.
I really didn't understand the "economic infrastructure" argument and I'm not sure they did, either, as they didn't bother to elaborate in the article. I have spent a lot more online shopping in the last 8 months than I probably have in the last 8 years. My B&M spending has shifted to digital, but hasn't everyone's? Is "infrastructure" only thought of in physical terms?
Not to mention, workplace buildings are a large overhead cost for a business. So not sure how the employee is the one seeing the largest benefits from remote work?
I don't think it's about benefit. It's about people with full salaries being able to work like nothing is happening from home contributing more so people that HAVE TO work outside their homes get more. Thing you use to write this uses AP as well as cables. Those things have to be maintained physically, there needs to be a physical server to store this comment, and factory to produce those chips physically. So it's not about benefit it's about least amount of thank you we can express to such people maintaining it. I'm just looking at how a lot of people started defending their salaries but are shopping like insane. Couldn't "you" just not buy thing you actually don't need and spare a bit for things that you depend on directly to stay at home ("you" as in people complaining about taxes and buying stuff, not you specifically)?
I don't fully understand how could DB exploit this or so but I know there might be some bad stuff that could potentially happen. On the other hand the idea of paying a bit more taxes to say thanks to the ones keeping the infrastructure and modern lifestyle alive is not too much for me. Most of the world is not US, a lot of countries actually tax the rich even more than non wealthy citizens so it's not exactly "working class suffers only" scenario.
I don't disagree with the sentiment. I have been very privileged in my industry during COVID and did not experience any disruptions to life.
I have lived in six different states in the US, some were high-tax some and low-tax. The problem is more tax $ does not equal better outcomes. In fact some of the best states I've lived in were very low on taxes (i.e. no personal income or sales tax) but ran very efficient and honest governments - Oregon for example has no sales tax and actually runs their budget at a surplus and sends taxpayers additional refunds every year. Other states have very high levels of corruption - and VERY high taxes. If I'm going to pay 5% I would rather have it go directly to a person's rent than just siphoned into yet another black hole.
I agree with that, however as I said I understand they may be some issues on how to handle it without going into "balck hole" but I trust that Germany, Sweden, Denmark, Norway, and such have less corruption and can be trusted moving money to it's actual destination. Not to get too much into it I'm saying that depends on the trust issue with the country as I had with mine which is why I moved here in the first place. However I was pointing out that a lot of people that were loud in the beginning were actually complaining about getting less money even though they might have enough but they just don't want to help anyone. On different comment I was targeting "home office setup" as something that can also be regulated where if you can work from home but don't have equipment employer must allow you to take home such equipment. So in all basic underlying idea was not so bad but got really criticised.
The underlying idea used to justify this is not to "say thanks to the ones keeping the infrastructure and modern lifestyle alive is not too much for me." I got no problem with that, I guess. Like, maybe temporary boosted Medicare access for "First responders" and so-called "essential" workers? IDK. The justification and the ideas proposed would look a lot different if the rationale was something more like, ""say thanks to the ones keeping the infrastructure and modern lifestyle alive" and less like the usual Critical Theory.
What Deutsche Bank's proposed is literally called a "Privilege Tax." What does "Privilege" mean, in that case? Does it mean the underlying idea is that those with a "Privilege" (with a capital "P") are oppressing, rather than helping, those without?
Your never going to see a bank advocating for the taxation of the corporate class. Banks will always defer taxation to the working class or suggest government incentives (which are payed by taxes disproportionately contributed by the working class).
We live in a world exclusively directed by short term gains and corporate profit and, again, taxation of the corporate class makes no sense from that perspective.
Yeah, as much good as economic freedom gives, we can't ignore the excesses or neglect to correct them.
I pay a lot of money to live close to work - literally across the street. Working from home doesn't save me any money: It costs me more (electricity for the most part, and this place has electric heating and "winter is coming"). I'm not saving on commuting and the likes since I didn't have those expenses before (though "location location location" means that I paid more for my place (mortgage + property taxes) than someone living much further away.
So that's a big fat NOPE from me.
When I read that I felt so enraged, what about the amount of money the employer saves by having the employees at home? No office space, no internet, electricity, parking space, snacks, etc.
Not to mention that, if efficiently managed, the employee is more productive than working in an office.
If anything, they should encourage more WFH instead of trying to tax it.
It pissed me off as well.
If you work from home, you still go to lunch (except pandemic time), but to a local restaurant. It means that the folks who live in the area also does not need to commute because they can sell their expertise right where they live.
As a ripple effect smaller towns will see more investment, and bigger cities might see actual affordable rent and housing prices.
And then there is the green factor to it: less commute less energy wasted. If we want to tax anyone it's the people who roam in huge SUVs: a ton of steel and machinery moves around one 100 kg dude back and forth twice a day.
Please note that DB actually suggested that the tax should be paid by employers, not employees. Following AlJazeera:
"The tax itself would be paid by employers if they do not provide a worker with a permanent desk (see ya’ later, hot desking)."
Not judging whether this idea does make sense or not, if you calculate the cost of the rental space and utilities, this tax might be comparable to company's savings due to remote work.
That's only half of it. Their argument is if your employer does provide you an office desk and you instead choose to work remotely, you are the one who has to pay the tax.
This would encourage employers to find ways to make the office a more hostile environment with many tiny desks crammed together small areas just for the sake of inducing people to work from home so they can save money. As long as the employer can manage to keep a few desks empty because people to work from home, they can both hold the costs of maintaining the workplace down a lot by inducing people to work from home and push the tax payments for remote work off on the employees, at the same time.
Most social engineering ideas like this crap from DB is developed with gross willfull ignorance of negative side effects.