With COVID-19 cases rising nationally once again and more lockdowns either currently in place or becoming more imminent, one of the ideas that some have floated in order to keep the economy moving forward is the concept of a work from home tax.
Specifically, the concept was put forth by Deutsche Bank as a way of aiding in the economic recovery when the pandemic is under control, which looks to be as soon as spring 2021. Basically, the proposal is to levy a 5 percent tax on Americans who continue to work remotely once the pandemic is over, with the expectation that doing so could raise $48 billion to bolster the economy.
Let’s take a closer look at this proposal and whether or not it may have momentum.
Why A Work From Home Tax?
According to studies, some 60 percent of American workers who are currently working remotely indicate that they’d like to continue to work from home even after the pandemic is under control. While modern technology allows Americans to stay connected while working from home, there are consequences that come from doing so.
For example, if you work from home, you’re likely spending less on gas for your vehicle, business lunches, clothing and office attire, and more. And being that workers are likely earning the same amount of money as they replace the company office with a home office, the thought is that this work from home tax could help make up for some of these losses from an economic standpoint. The $50 billion or so that is infused into the economy as a result could help make up for economic losses elsewhere and also work to help subsidize the salaries of lower-income Americans.
The Deutsche Bank researchers have said that a work from home tax has been necessary for years, with the COVID-19 public health crises only making this more apparent.
Could it Work?
While an interesting concept, it’s unlikely to take off. There are some flaws in the proposed tax, notably that the habits of those who commute to the office are too unpredictable. While it’s obvious that many who work out of a home office aren’t spending the same amount of money on things that they would if they were reporting to the office on a daily basis, it’s also a good bet that they’re using this recouped savings and implementing it elsewhere. Perhaps they’re working on a home office renovation project, ordering more products online, or getting carry-out or food delivery more.
The bottom line is that what workers aren’t spending based on their commute into the office each day, they’re likely allocating elsewhere. And it’s largely why a work from home tax would likely fail if it were ever proposed. Throw in the fact that you could argue that it’s a socialist policy to help subsidize lower-income workers, and things would get even more dicier.