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The COVID-19 crisis is worsening inequalities around the world as people lucky enough to work remotely continue to earn a salary while millions of others lose their livelihoods or risk their health in jobs deemed “essential” but pay low wages.
Now, one of the world’s largest banks has proposed a solution to level the playing field and create a more inclusive economy as nations rebuild themselves from the pandemic:
Tax remote workers.
In a report titled “What We Must Do to Rebuild” (PDF), Deutsche Bank suggests imposing a 5% daily tax on people who work from home and using the funds raised to subsidize low-paid workers who are unable to work remotely.
“For years, we have needed a remote worker tax – COVID has just made that clear,” the report’s authors say.
Deutsche Bank says the 5% tax is justified because people who work from home “contribute less to the infrastructure of the economy while still receiving the benefits.”
For years we have needed a remote workers tax – COVID simply made it obvious
To understand what the bank is for, take the example of someone who used to commute from a suburb to work in a New York City office.
That person’s contribution to the economy begins before they even leave the house when they choose a store-bought suit that relies on people wanting to look smart at work. Eliminate the demand for office wear and that store and its employees are seeing lean times.
If the employee takes the train to the city, he must purchase a ticket, which helps keep public transport running and transit workers at work. If they crave a morning latte, they’ll drop by a bar, which helps keep the baristas employed on a remunerative basis, not to mention all the vendors stocking that café.
There are security guards at the entrance to the office building whose work depends on the people using that facility; custodial workers who make a living by cleaning it; people making sure the office supply closet is stocked and the list goes on.
The point is that employees are an integral part of an economic ecosystem that has been built over decades, so when they stop going to the office, it negatively affects many companies and jobs.
Considering that the number of remote workers in the United States has increased tenfold since the pandemic and sevenfold in the UK, we are talking about a significant disruption.
A 5% tax on every work from home would not leave the average person in worse shape than if they worked in the office
Meanwhile, remote workers are reaping tangible benefits in the form of higher and intangible savings, such as greater flexibility or 30 minutes of extra sleep because they don’t have to go through the torturous routine of a morning commute.
“People who know WFH [work from home] and disconnecting from society face-to-face gained many benefits during the pandemic, “the report found.” A 5% tax per day from WFH would leave the average person in no worse shape than working in the office. “
How is it possible? Deutsche Bank assumes that the average wage of a remote worker in the United States is $ 55,000 per year. At that rate, a 5% fee equals just over $ 10 per business day. This is the equivalent of lunch money for many workers in the US and Europe – money they now save if they don’t have to go to the office.
According to Deutsche Bank, in the United States alone, the remote worker tax could increase by $ 48 billion a year – enough to give a grant of $ 1,500 to each of the estimated 29 million workers who cannot work from home and earn. less than $ 30,000 a year – a pool that includes essential workers.
People who can work from home and disconnect from society face to face have reaped many benefits during the pandemic
The report also says the tax would only apply when governments don’t advise people to work from home and exclude low-income self-employed and remote workers (insert collective applause from struggling freelancers). The tax itself would be paid by employers if they didn’t provide a worker with a permanent desk (see you later, hot desking).
Deutsche Bank further argues that the tax has the added benefit of not supporting businesses that may never recover from the pandemic, but it helps “the mass of people who have been suddenly displaced by forces beyond their control.”
“Those who are lucky enough to be able to ‘disconnect’ from the economy face to face must ‘help’ them,” the report said.
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