Obvoiusly.
Then why would a WFH tax be needed?
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If only they hadn’t spent it all on avocado toast. /s
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I have been working from home since covid started. I think this would be an okay idea. I would be willing to pay a 5% tax for working from home provided it also included the rich and ultra-rich paying their fair share. We definitely need a wealth tax and to repeal the Trump tax cuts.
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This paper proposes that persons who choose to work from home, (and have higher than average incomes) be taxed at a rate equal to the money they would have saved by not commuting in, buying food at a local cafe, etc, etc) with the revenues somehow used to subsidize those thrown out of work by the lack of commuters. It would only affect persons of a certain income, and essentially prevents workers from saving money by staying home, or employers from saving money by not providing office space.
The money raised by such a tax would fund cash grants to those in the lowest income octile.
Stated that way, it doesn’t seem so obnoxious, but revenue neutrality (you can work here or you can work there, but either way, you/or your employer won’t save money) seems like a royal pain to get right.
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Basically it sounds like a desperate grasp at maintaining the status quo from the perspective of an organization that sees a sea change afoot that they didn’t plan for. Anything that hastens the demise of corporate cube farm work models is welcome and should be incentivized not dampened. The clear skies over L.A. at the beginning of the lock-down are proof enough of the social and environmental good in reducing unnecessary work related location shifts.
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We live in a society controlled by those inclined to trust Deutsche Bank.
Saying you shouldn’t trust Deutsche Bank is not an effective argument. Taking the proposal and ripping it to shreds on the basis of its content would both destroy the proposal, and further damage Deutsche Bank for being associated with such demonstrably fallacious arguments. Two birds with ones stone–if it’s as bad as you say.
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Fair points - for sure.
I’d add that …
… almost risks underselling the the utter intractability, (impossibility of modeling complex dynamic systems and other topics absent from econ 101) - and (perhaps this is my mistrust of the DB faithful showing) I would expect the bankers to consider that a feature rather than a bug. It’s not a completely bonkers concept in a broad sense - can think of the example of the U.S. government subsidizing the aviation industry and smaller regional airports - on the basis that having this infrastructure persist is crucial to national security and beneficial to maintain for various economic and structural reasons. I don’t know if that logic reasonably extends to cafes near office parks though.
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Unless you’re willing to take a shady bank’s word at face value, this proposal isn’t really intended to help workers who can’t WFH but to preserve the value of DB’s exposure on downtown commercial office space and/or set up a bailout fund that will end up in its pockets.
To fund the more laudable goal we all agree on, employees who do WFH (and who often already pay for the “privilege”) shouldn’t be taxed at all. Taxing the corporations that will realise enormous cost savings from letting their employees WFH, on the other hand, should more than cover the bill for a genuine relief effort for downtown workers.
People (and NPR) have to stop falling for BS like this whenever crocodile tears are shed by predatory corporations in this way. DB doesn’t give a damn about downtown restaurant workers and employees of dry cleaners and parking lot attendants – it only cares about the rent being paid so it can collect the mortgages.
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What I think rubs me the wrong way about this proposal is that it manages to combine pretty much the opposite of Pigouvian taxation, a massive implicit bias for(and willingness to subsidize indefinitely) the status quo; and a structure that, in practice, is aimed straight at the middle class; all while ignoring simpler and/or more effective options.
There are certainly service-sector businesses in office parks that depend on people coming to work; but commuting, especially in the areas where a mixture of zoning and cost makes for long commutes and very heavy separation of commercial and residential areas, is pretty heavy on negative externalities. Normally, if you get into behavior-based taxation it’s to steer people away from destructive practices, not actively punish them for failing to keep them up.
As for the status quo aspect; a plan to tax working at home rather than being in the office, without any mention of end date or exit strategy, is essentially assuming that the sharp divide between commercial and residential(and work schedules that mean that grabbing a cup of coffee at the shop on the way in because you rushed out the door too quickly to prepare a pot; or that a restaurant is effectively off the table if you can’t grab something to go and have it back at your desk within the half hour) is natural and eternal and it’s just to be taken for granted that being in the office is the only reason you would consume goods or services outside the home (an especially interesting proposal given that the home worker is allegedly enjoying more money and more free time; both useful things if one wishes to patronize a local business).
So long as residential zones offer nothing to do and nothing to buy even if you have time and money, while office sectors are dead zones unless being at your desk by 9 every day is mandatory, yes, shifts in where people work are going to be pretty messy. That’s much less an argument for permanent taxation of people with the temerity to work elsewhere and much more an argument for better mixed-use zoning than is common.
It is also status-quo focused in its willingness to conflate the bloodbath in retail goods and services caused by the fact that most of them are currently deemed high risk and discouraged for non-essential purposes by any responsible health authorities with the (definitely nonzero; but much narrower) one in specifically commuter-focused areas. So long as there is a pandemic on you aren’t going to get someone back to the bar whether they are working at home or in the office; in the absence of one(which, in the DB proposal, is the only time the taxation occurs) there is reason to suspect that damage will be much narrower, confined to areas that cannot exist without office workers; and other areas will be less obviously affected(potentially steady state; potentially absorbing some of the time and money that the commute-driven ones used to).
As for the de-facto-targets-the-middle-class and ignores-simpler-or-more-effective-options aspect: the proposal explicitly exempts the poor and the self employed; and is a tax on earnings/payroll rather than capital gains; so, without specifically saying it in so many words; it’s a tax on salaried employees far enough up the ladder not to count as poor; but not properly wealthy enough that their salary is a pittance relative to capital gains and other more esoteric forms of income; which means the middle class.
The ‘simpler’ and ‘more effective’ options, respectively, would be just straight up taxing the middle class incrementally more(no need to track in-office/out-of-office days; just existing income/payroll tax mechanisms; and that’s where the intersection of enough money to not be a waste of time and not enough money to afford tax evasion is); and actually throwing the political will(and considerable investigative effort) at focusing on taxing where the money is, even if it means going up against people with sophisticated lawyers and impressive networks of offshore trusts and such.
This isn’t a “fuck you, I’ve got mine” thing for me; I don’t mind paying my bit for the society I’d want to live in; it’s a “this proposal is a mixture of actively destructive and unimaginative or lazy at pretty much every level” thing.
I’m currently mixed WFH/onsite depending on whether the more urgent need is hardware support/configuration/logistics or assorted configuration twiddling on remote systems. I recognize that I’m way the hell luckier than the people who are unemployed or on the shit end of the service sector and dealing with crazed covidiots; but I’m also deeply un-sold on the idea that I’m a social parasite worth taxing on the days I VPN in; while I’m keeping society’s infrastructure together on the days I sit in a 25%-full cube farm; except in the mostly negative sense that I do my bit for congestion and fossil fuel use on those occasions.
With the plague on I’m pretty much unable to be a customer of any of my preferred local places regardless of where I’ve been working; and in the longer term I don’t really want to preserve the stark ‘Office’/‘residential’ divide. I want residential areas with places I might patronize if I’m working at home; and the same move toward balance, from the opposite side, for the office concentrations that are no longer as full as they used to be. Livable urban core is pure gold in particular, some of the more exurban office parks probably just need to be written off; but trying to keep a frankly-not-all-that-great real estate status quo in amber seems profoundly perverse compared to just levying whatever straight, non-pigouvian taxes are needed for a social safety net and working to turn the change in working arrangements to the benefit of policies that would be of value.
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That’s only true if people avoid the tax and continue to demand commercial real estate. If the bluff is called, and employers or employees pay for the privilege of working from home, the revenues give money to the poor.
This! B/c Douche Bank is saving the cost of business space. But NOOOOOOO, gauge the little guy b/c you’re a big political donor/boner and have lots of lawyers to help you NOT pay your share of taxes even though you use the infrastructure we all paid for to make a profit so you can overpay your CEO and Board. F**k these amoral “legal person” corporations.
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I think Deutsche Bank should pay my extra utility bills.
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They probably shouldn’t have gone out to eat all those times, and ate a salad at their desks… also, they drank far too many lattes from that coffee shop around the corner… so wasteful.
Taxation does not suck, and as someone who is doing okay, I don’t mind paying more. What irritates many of us is that global corporations manage to skate out of almost all of their tax burdens, while benefiting from being allowed to operate and profit in multiple countries. The problem isn’t that the middle classes aren’t paying their fair share, it’s that the elites are not paying theirs.
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“Remote workers are contributing less to the infrastructure of the economy whilst still receiving its benefits.”
This is a failed premise, remote workers are still paying taxes which means that they are contributing exactly the same amount to the infrastructure of the economy. Unless of course you see it from the perspective of the landlord or petrochemical company.
Sounds like a paradigm that requires a business model adjustment. Nope, let’s tax 'em instead.
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Don’t forget there’s plenty of working-class information economy workers too who’ll be fucked over. Most call centres in the UK are sending their staff home with a laptop and a Skype connection (I, indeed, resemble this remark). I wouldn’t put it past Boris to enact something this stupid in order to appease his Eton chums, but I’d hope it’d provoke poll tax-grade riots.
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Office workers can bring food to work so purchasing a prepared lunch is not a necessary expense. Only the cost of transport is saved and is the case of cycling or walking that is virtually nothing. People working from home also have to provide an appropriate workspace and pay extra on utility bills which reduces any saving. When you add the fact that people working from home all day avail less of public services this does not stack up at all.
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Agreed.
I went to NPR this morning and looked for what I half heard while working yesterday. I thought I heard this tax would be levied now - during the pandemic - to help people who are unemployed because of the it.
Instead, I found that the proposed tax is for after the pandemic for people who continue to work from home. And it was, indeed the Deutsche Bank proposal. Ick.
I agree that elites are not paying their fair share and haven’t in years (if ever).
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Yep. I figured you agreed with that point. Given that corporations like Amazon have paid no tax in recent years, it’s a known problem that I’d hope our elected officials will begin to address. The heaviest tax burden right now is squarely on the shoulders of middle and upper middle class people, as the working poor (for good reason) pay no tax and the elites pay little to no tax. I’m happy to allow those with little to continue to have no or very little tax burden. That’s as it should be. I’m also happy to continue to pay my fair share. I DO want those who have benefited so fantastically from our system to act like they understand how they benefited and pay their fair share. Some like Bill Gates have at least acknowledged that disparity…
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That’s Communism and Socialism and Treason. You can’t expect the Job Creators, Our Beloved Ruling Class, to look down from their mansions and trickle down on us if they have to pay for things.
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