• What initially was a privilege for the few, remote workers and digital nomads around the world in the pre-corona era, has now become a reality for many. Since the COVID-19 outbreak, many professionals around the world suddenly found themselves working from home, and very rapidly it has become the ‘new normal’.

Should remote work come with its own tax rule, though? That’s an idea suggested by a group of researchers at Deutsche Bank. In their report, they suggest that remote workers “should pay a tax for the privilege,” each day they decide to continue working from home after the pandemic measures begin to cool down. This tax would serve to subsidize the lower-income, frontline or essential workers who cannot work from home.

An employee working from home tended to have a higher salary. Based on the assumed average salary of a remote worker, he calculated that a 5% tax rate would leave neither companies nor individuals any worse off.

According to Luke Templeman, strategic at Deutsche Bank, “the amounts raised could fund material income subsidies for low-income earners who are unable to work remotely”. This “privilege tax” wouldn’t cause too much financial harm, he says, emphasizing that remote workers would be saving money on commuting to work, buying lunch, work clothes and so on, “contributing less to the infrastructure of the economy whilst still receiving its benefits”.

This money would then be used to fund subsidies for low-income employees who cannot perform their jobs from home. The tax revenue could also sustain people who have lost their jobs or who had to resort to take on lower-paid jobs while looking for other opportunities.

Templeman said the tax should’ve been put in place years ago, but coronavirus now made it extra clear and speeded things up. The report estimates that a 5% tax rate on days on the average salary of a remote worker, could generate a revenue up to 48 billion dollars a year in the US (EUR 40 billion) and 6.9 billion pounds in the UK (EUR 7,7 billion). In Germany that amount would be EUR 20 billion.

During the summer of 2020, the amount NUMBER of companies with flexible working conditions in place, saw a gigantic rise from 15% to 76% as the coronavirus took over the world.
Big enterprises such as Google, Twitter, Airbnb and American Express have all further extended their work-from-home policies. It is nearly impossible to go back to how things were before when it comes to remote work. According to the report, 60% of the people working from home in the outbreak, would like to continue to do so for a few days per week, even once a working vaccine has been put in place.

According to Jim Reid, head of fundamental credit strategy and thematic research at Deutsche Bank, “working from home will be part of the ‘new normal’, after the pandemic has passed.”

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