Economists at Deutsche Bank Research recently floated the idea of imposing a 5 per cent tax on those who choose to work from home after the pandemic has passed, arguing that remote workers contribute less to the infrastructure of the economy while still receiving its benefits.
Bank strategist Luke Templeman summed it up thus: “For years, we have needed a tax on remote workers – Covid has just made it obvious.”
He and his team argue that employees can afford to pay for working from home because they spend less on commuting, lunch on the go, and even office clothing. They calculate that such a tax would raise £7 billion a year in the UK that could be redistributed to low-income earners who are unable to work remotely, and who thus assume higher costs.
On the surface, it sounds like the perfect solution to the growing unemployment and wage inequality that the pandemic is creating. Those fortunate to have been in a job less affected by Covid would be lending a hand to those who have borne the worst of the economic brunt, such as workers in the hospitality sector.
A portion of the money could also be used to help businesses that have suffered a drop in demand due to lower passing trade from the increase in remote working, and who would continue to be affected if home working became the default after restrictions are lifted. Transport providers would be among those at the top of this list, having lost huge amounts of revenues from the absence of commuters.
But is it fair or realistic to ask those who will continue working from home to pay for the so-called “privilege”?
Cynics point out that our societies have been built to accommodate in-office work, which is good for real estate and other supporting services. That in turn is good for large institutions like Deutsche Bank, whose investments are founded on this system.
On a practical level, critics say such a tax could trigger legal issues, while also opening up the prospect of huge amounts of misreporting and distortion. It also runs contrary to the prevailing push to cut down on carbon emissions, a great deal of which are the result of the mass daily commute.
Home workers also have increased costs of their own, such as higher heating and electricity bills. If wealth redistribution is required to address disparities caused by the pandemic, a far simpler solution is to raise taxes on the highest earners, regardless of where they work.