Deutsche Bank Proposes Taxing Employees Who WFH

[John Galt incarnate!]

What is your opinion of Deutsche Bank's proposal?



Deutsche Bank Research: Tax home workers 'to help those ...

bbc.com

1 day ago — Deutsche Bank Research suggests a tax of 5% of a worker's salary if workers choose to work from home when they are not forced to by the ...



Deutsche Bank proposes a 5% tax for remote workers

cnbc.com

8 hours ago — Deutsche Bank proposes a 5% tax for people still working from home after the pandemic. ... According to the Deutsche Bank Research report, a 5% tax rate on those days on the average salary of a remote worker could raise $48 billion a year in the U.S., £6.9 billion in the U.K. and 15.9 billion euros in Germany.

[therethere]

*If this was US based* I feel like the employer's should be paying this, not the employee. I mean, they're saving gobs on office space and they definitely aren't going to increase salaries to account for their savings. My expenses have actually increased since I've been working from home. As a w2 worker, you're already not allowed business deductions of expenses or percentage of home use. So the monthly recurring expenses of cell phone, increased internet, extra bedroom costs, etc. are already being absorbed by the employee. Plus whatever office supply and workspace setup costs.

Maybe I'd be okay with it if they expanded the business expenses allowance to account for all of the above.

[phildonnia]

Just to be clear, I understand this is primarily being advocated for the European economy. 

If this ever gains traction in the US, I'm just glad I'm FIREing next year. 

Yes, I can and will save money by working from home.  Well, we can't have that, can we?  What an arbitrary government money-grab.  What a stupid idea.

[ExitViaTheCashRamp]

Don't why he isn't just a bit more honest, this tax is just a crowdfunder for sandwich shops near office blocks and mass transit systems suffering a lack of ticket sales.

 Not sure how is getting around the perverse incentive of 'lets get back a huge number of commuters causing enormous carbon emissions'.

 Maybe he is just lonely in his office and wants someone to have lunch with.

[Bloop Bloop Reloaded]

Why are we taxing people for making positive lifestyle decisions? Just because they can afford to pay?

[John Galt incarnate!]

Don't why he isn't just a bit more honest, this tax is just a crowdfunder for sandwich shops near office blocks and mass transit systems suffering a lack of ticket sales.

 When this topic was introduced  today on a talk show, this was the first observation.

[John Galt incarnate!]

Why are we taxing people for making positive lifestyle decisions? Just because they can afford to pay?

Is  "privilege" precedent of one's opportunity to WFH?

I think "privilege tax" so implies.

USA TODAY

Employees working from home should pay 'privilege tax' to support workers who cannot, Deutsche Bank research note says

"Our calculations suggest the amounts raised could fund material income subsidies for low-income earners who are unable to work remotely and thus assume more 'old economy' and health risks." Jim Reid, global head of fundamental credit strategy and thematic research at Deutsche Bank

[jrhampt]

WTF.  I agree, as a WFH employee I'm giving them free office space.  I'm using my utilities and resources, my toilet paper.  This is ridiculous.

[cool7hand]

Isn't this just clickbait?

[chemistk]

Yeah I really don't think this is feasible.

How would DB account for my circumstance? I go into the office (lab) 3-4 days out of the week but I don't stay the whole day. I'm obligated to leave once the work that I needed to do in the lab is complete, so some days I am in 7-11 and others I'm in 7-2 but never a full work day. Would my tax be prorated? Would I be forced to document my exact arrival time at the office?

Rhetorical questions, of course, but just an illustration that this seems like a bunch of horsecrap. Let the economy shift naturally, rather than trying to pretend like we all need to support the ridiculous number of food establishments we already have.

[Bloop Bloop Reloaded]

It creates a perverse incentive - it's like taxing people for *not* smoking. "Oh, you benefit from having good health, since you don't smoke. You should pay more tax."

If WFH was going to be taxed I'd just say "Ok great, I'll work at the office". Then I'll go in one day a week. Who's going to monitor this? I doubt my boss (I don't have a boss, but imagine I did) would care either way.

[slappy]

It creates a perverse incentive - it's like taxing people for *not* smoking. "Oh, you benefit from having good health, since you don't smoke. You should pay more tax."

If WFH was going to be taxed I'd just say "Ok great, I'll work at the office". Then I'll go in one day a week. Who's going to monitor this? I doubt my boss (I don't have a boss, but imagine I did) would care either way.

Exactly. So I have the privilege of being able to work from home...I also have the privilege of going into the office. I get what they are trying to do, but I don't think this is the way to do it.

[John Galt incarnate!]

Isn't this just clickbait?

No.

This topic is   relevant as a proposed, partial solution to the economic damage and dislocation caused by COVID-19.

If I thought it was clickbait I would not post it.

I am not and will never be a troll.

I am scrupulously observant  of the fact that I have no right to  participate on any privately owned website so when I'm allowed to join and participate on any such website  I always treat the owners, moderators, and members respectfully: I'll never waste their time by posting clickbait.

[John Galt incarnate!]

Yeah I really don't think this is feasible.
 Let the economy shift naturally

If WFH is trending upward one of the questions that occurs to me is if WFH becomes  a permanent  shift how long would the WFH tax be collected?

[Kazyan]

Directly taxing people for staying at home is a great way to clog the roads for no reason, and I'm not sure how such a tax reasonably follows from "we're concerned about the people who can't stay home". The perverse incentive isn't some subtle Law of Unintended Consequences thing; it's obvious, and I wouldn't be super surprised if that was the purpose: putting people back in the wage cages.

[maizefolk]

A tax on people not smoking because they can afford to pay more (less health problems) sounds ridiculous. But in reality, a few states like California, New York, and Massachusetts effectively do this by prohibiting "tobacco use" as a factor insurance companies can consider when deciding how much to charge different people for health insurance on the ACA (Obamacare) exchanges. So in those states non-smokers pay more in order to subsidize smokers to be able to pay less.

Similarly a tax on working from home directly sounds so ridiculous I doubt it would ever pass anywhere. But it may well be governments in some countries will come up with ways to achieve the same end less directly. (For example an overall tax increase to deal with COVID combined with a "commuting expenses" tax credit.)  In the US as a whole we seem headed for gridlock, but I could see something like this happening at the state level in a few places. Don't have a good enough sense of how it would play in different European nations though.

[MrThatsDifferent]

I was furious when I first read this. WTF is DB thinking? They want to essentially “fine” people $10/day for WFH!?! Insane. I’ve never seen a tax proposal so hostile. Boycott DB and let them know they can GFT.

[bacchi]

It seems like, if large WFH persists, the societal cost savings are there but they're delayed. There will be fewer commuter lanes heading into the cities, less road maintenance, and even less utility upgrades for commercial development.

It is a massive shift all at once but, in the end, it's probably a good shift that's less expensive than the usual 9-5 rush hour schtick.

[havregryn]

I think you guys are missing the point. They want to tax people who "won" the covid response to be better able to help those who "lost" it. I just saw a really good quote:
"There was never any lockdown. There was just middle-class people hiding while working-class people brought them things."
I don't know how it was in the US, but yeah, in Europe this is how it was. There were these "lockdowns" but what they came down to was white collar professionals with computer based jobs getting home offices and everyone else getting royally screwed.
That now home office people are whining about needing their employers to pay for ergonomic desks while people who can't work from home are queuing up in front of unemployment offices is such a cruel, cruel joke..... this proposal is at least recognising how profoundly messed up this whole thing is.

I was working mostly from home even pre-covid and we really love my husband now working from home too, but I still find it ludicrous that everyone is now acting as if home office is a given thing for everyone. This is clearly meant for European policies as in Europe it's unlikely that the governments will just shrug this off, they will have to come up with some kind of universal basic income scheme for those who simply can't work from home. Money for that will have to come from somewhere...but yeah, of course it would be better to just tax the hell out of really rich people and corporations, not sure why it always comes down to working folks to finance such schemes.

[Kazyan]

I think you guys are missing the point. They want to tax people who "won" the covid response to be better able to help those who "lost" it. I just saw a really good quote:
"There was never any lockdown. There was just middle-class people hiding while working-class people brought them things."
I don't know how it was in the US, but yeah, in Europe this is how it was. There were these "lockdowns" but what they came down to was white collar professionals with computer based jobs getting home offices and everyone else getting royally screwed.
That now home office people are whining about needing their employers to pay for ergonomic desks while people who can't work from home are queuing up in front of unemployment offices is such a cruel, cruel joke..... this proposal is at least recognising how profoundly messed up this whole thing is.

I was working mostly from home even pre-covid and we really love my husband now working from home too, but I still find it ludicrous that everyone is now acting as if home office is a given thing for everyone. This is clearly meant for European policies as in Europe it's unlikely that the governments will just shrug this off, they will have to come up with some kind of universal basic income scheme for those who simply can't work from home. Money for that will have to come from somewhere...but yeah, of course it would be better to just tax the hell out of really rich people and corporations, not sure why it always comes down to working folks to finance such schemes.

In that case, a dedicated reparations program for COVID-19 makes perfect sense. I'm not sure a specific WFH tax is the best way to execute that, though.

[slappy]

I think you guys are missing the point. They want to tax people who "won" the covid response to be better able to help those who "lost" it. I just saw a really good quote:
"There was never any lockdown. There was just middle-class people hiding while working-class people brought them things."
I don't know how it was in the US, but yeah, in Europe this is how it was. There were these "lockdowns" but what they came down to was white collar professionals with computer based jobs getting home offices and everyone else getting royally screwed.
That now home office people are whining about needing their employers to pay for ergonomic desks while people who can't work from home are queuing up in front of unemployment offices is such a cruel, cruel joke..... this proposal is at least recognising how profoundly messed up this whole thing is.

I was working mostly from home even pre-covid and we really love my husband now working from home too, but I still find it ludicrous that everyone is now acting as if home office is a given thing for everyone. This is clearly meant for European policies as in Europe it's unlikely that the governments will just shrug this off, they will have to come up with some kind of universal basic income scheme for those who simply can't work from home. Money for that will have to come from somewhere...but yeah, of course it would be better to just tax the hell out of really rich people and corporations, not sure why it always comes down to working folks to finance such schemes.

In that case, a dedicated reparations program for COVID-19 makes perfect sense. I'm not sure a specific WFH tax is the best way to execute that, though.

Totally agree with both of you. I said earlier, I get what they want to accomplish, but this doesn't seem like the right way to do it.

[Bloop Bloop Reloaded]

Even if we accept the argument that middle class office workers "won" from covid, that doesn't mean it requires a societal rebalancing. I think my country (Australia) has got the formula right. We spent about $100 billion in softening the blow for the workers who lost their jobs, but now we're gradually shutting the taps. It's good to soften the blow and expand the safety net, but there's no societal obligation to rebalance everything; otherwise you may as well rebalance for the fact that climate change hits coastal areas harder, or globalisation hits low-skilled jobs harder. At some stage it must be accepted that life's vicissitudes cannot be 100% rebalanced by the state.

[PDXTabs]

Don't why he isn't just a bit more honest, this tax is just a crowdfunder for sandwich shops near office blocks and mass transit systems suffering a lack of ticket sales.

In normal non-pandemic times I actually spend more money eating out when working from home. That's because I get tired of working from home and want a change of scenery.

[GuitarStv]

I'm OK with this tax.  I'd like to see it expanded though.  Seems weird that those who could work from home are taxed but those who are independently wealthy and don't need to work are not.

[FireLane]

Taxing WFH is an unbelievably bad idea. The classic economic principle is that you tax something when you want less of it. We don't want to disincentivize people to stay home!

Until the vaccine is rolled out, we should be encouraging everyone who can work from home to do so. That means less transmission, less community spread and less risk for the essential workers who can't do their jobs from home.

[maizefolk]

Until the vaccine is rolled out, we should be encouraging everyone who can work from home to do so. That means less transmission, less community spread and less risk for the essential workers who can't do their jobs from home.

This is an important point which I think is missed in all the talk about privilege.

Yes, staying home makes a person more safe than a person who still has to physically travel to their job site to work. But if the people staying home went back to work it would make things MORE dangerous for those who have to be working in person either way.

[ixtap]

Until the vaccine is rolled out, we should be encouraging everyone who can work from home to do so. That means less transmission, less community spread and less risk for the essential workers who can't do their jobs from home.

This is an important point which I think is missed in all the talk about privilege.

Yes, staying home makes a person more safe than a person who still has to physically travel to their job site to work. But if the people staying home went back to work it would make things MORE dangerous for those who have to be working in person either way.

The researchers specifically said this tax should be instated once the pandemic is over.

[havregryn]

Even if we accept the argument that middle class office workers "won" from covid, that doesn't mean it requires a societal rebalancing. I think my country (Australia) has got the formula right. We spent about $100 billion in softening the blow for the workers who lost their jobs, but now we're gradually shutting the taps. It's good to soften the blow and expand the safety net, but there's no societal obligation to rebalance everything; otherwise you may as well rebalance for the fact that climate change hits coastal areas harder, or globalisation hits low-skilled jobs harder. At some stage it must be accepted that life's vicissitudes cannot be 100% rebalanced by the state.

Except you can hardly call state implemented policies "life's vicissitudes". Life's vicissitudes would've been to just let covid run rampant and see what happens, and there too you'd have those hit harder and those hit less, so what's there to fix? Once it became obvious that the way to fight this is going to be a way that unfairly hits some segments of society, it's also obvious that somehow the state is supposed to help those who were hit hard by the measures used to control covid.
I mean, I don't get your argument at all, if the state is not supposed to try to fix the aftermath of covid because shit happens, why was it supposed to fix covid to begin with?

[Bloop Bloop Reloaded]

Until the vaccine is rolled out, we should be encouraging everyone who can work from home to do so. That means less transmission, less community spread and less risk for the essential workers who can't do their jobs from home.

This is an important point which I think is missed in all the talk about privilege.

Yes, staying home makes a person more safe than a person who still has to physically travel to their job site to work. But if the people staying home went back to work it would make things MORE dangerous for those who have to be working in person either way.

The researchers specifically said this tax should be instated once the pandemic is over.

That will simply lead to negative externalities like people commuting to work simply to avoid the tax, causing unnecessary congestion, etc.

Even if we accept the argument that middle class office workers "won" from covid, that doesn't mean it requires a societal rebalancing. I think my country (Australia) has got the formula right. We spent about $100 billion in softening the blow for the workers who lost their jobs, but now we're gradually shutting the taps. It's good to soften the blow and expand the safety net, but there's no societal obligation to rebalance everything; otherwise you may as well rebalance for the fact that climate change hits coastal areas harder, or globalisation hits low-skilled jobs harder. At some stage it must be accepted that life's vicissitudes cannot be 100% rebalanced by the state.

Except you can hardly call state implemented policies "life's vicissitudes". Life's vicissitudes would've been to just let covid run rampant and see what happens, and there too you'd have those hit harder and those hit less, so what's there to fix? Once it became obvious that the way to fight this is going to be a way that unfairly hits some segments of society, it's also obvious that somehow the state is supposed to help those who were hit hard by the measures used to control covid.
I mean, I don't get your argument at all, if the state is not supposed to try to fix the aftermath of covid because shit happens, why was it supposed to fix covid to begin with?

If you're saying we should make reparations to those in society whose businesses or jobs were shut down because of covid restrictions, I agree entirely. (Though the Australian federal and state governments have been doing that anyway, with subsidies and a doubling of the dole.) In fact the number of people in poverty drastically reduced during our lockdowns because literally everyone on any form of government assistance got a boost or another form of assistance.

That said, the extent of those reparations can stop once the commercial restrictions stop. Once businesses open up in full - and that might take another 6 months - then there's no more cause for reparations, is there? The people commercially affected have been - other than some individuals, like sole traders like me (but I'm not too fussed about that) - more than adequately repaid.

[fattest_foot]

This is rich. A bank that was just fined for money laundering thinking they should be the ones dictating what any of us do.

It's also completely backwards in logic. Generally we place a tax on something to recoup the cost of using it; tax on gas to help pay for roadways/maintenance, tax on property that goes to local schools and emergency services, etc. In this circumstance we're taxing people who are using less of something to recoup the cost of it. What?

[Bloop Bloop Reloaded]

It's essentially a wealth tax, i.e. a tax on non-consumption.

[BlueMR2]

Initial thought is that it's the dumbest thing I've ever heard.  So, I'm going to need to buy extra equipment, keep space free for work, pay higher Internet costs (my area is data capped to a fairly low value by default and lifting it just about doubles the cost), and get charged extra to do it?

Second thought is that wow, do we really want to encourage people to NOT save resources?  If it's going to cost me 5% to stay home, I will start driving to the office again (clogging up roads, polluting, etc) as it doesn't cost me 5% to commute.

Third thought is OK, I get what they are trying to do, but this is a really bad idea.  It's a poorly thought out attempt to prop up what may be failing industries in the future.

[SotI]

It's essentially a wealth tax, i.e. a tax on non-consumption.

This reminds me of a robot short story (Asimov, I think?) where only the rich could afford to not consume. The poor ones had to consume (or were penalized), until one guy tried to bypass this using his robot to wear down his stuff in record time, helping him to climb the social ladder.

Anyhow, in case of such a tax, I'd probably act based on the net effect (taking into account fuel and car depreciation). It would make me more adverse to retail shopping overall, however - and that's after already mostly going for second-hand items (which are mostly VAT free).

[GuitarStv]

It's essentially a wealth tax, i.e. a tax on non-consumption.

This reminds me of a robot short story (Asimov, I think?) where only the rich could afford to not consume. The poor ones had to consume (or were penalized), until one guy tried to bypass this using his robot to wear down his stuff in record time, helping him to climb the social ladder.

Anyhow, in case of such a tax, I'd probably act based on the net effect (taking into account fuel and car depreciation). It would make me more adverse to retail shopping overall, however - and that's after already mostly going for second-hand items (which are mostly VAT free).

Not Asimov, it was Frederick Pohl's short story The Midas Plague.

[SotI]

It's essentially a wealth tax, i.e. a tax on non-consumption.

This reminds me of a robot short story (Asimov, I think?) ...

Not Asimov, it was Frederick Pohl's short story The Midas Plague.

Great, thanks! It's been decades, so I really didn't remember where I read it.

[Chraurelius]

Once again, a corrupt rich person wants middle class people to subsidize the poor people that rich people exploit.  Why doesn't HE help poor people with his undeserved salary and ill gotten gains?  I really get tired of rich people's whining.

[Buffaloski Boris]

Just another tax to be levied on workers rather than on rentiers. Add that WFH tax onto commuter taxes, social security taxes, higher income taxes, tolls, parking tickets, etc. All things that people living off of their investments can generally avoid. Call the WFH tax reason number 1267 to be FI.

[nick663]

If it was implemented, I would pay it without hesitation.  5% would be $19.23/day on a 100k salary.  I'll pay that just to get the hour of commute time back without even getting into the other expenses from going into the office.  Easy math.

I think this type of proposal is pretty useless in the US though as our society has spent any "savings" due to the pandemic.  I know my side business has had a fantastic year and saw a sharp increase of sales starting in March.

[ender]

I read this a while back and while I think it's laughable, it's something I expect to see pushed forward longer term. Imagine how much overall societal benefit there would be if everyone who wants, works remotely?

Regardless, if covid lasts long enough, businesses that this will help will either die or reinvent themselves.

[Zamboni]

Deutsche Bank is run by assholes to launder money and prop up other assholes.

That is all.

[desk_jockey]

Generally we place a tax on something to recoup the cost of using it; tax on gas to help pay for roadways/maintenance, tax on property that goes to local schools and emergency services, etc. In this circumstance we're taxing people who are using less of something to recoup the cost of it. What?

That is one reason that we place a tax on something. Another reason is to encourage or discourage certain behaviors. 

havregryn and others have pointed out some valid justifications for such a tax.  But if it’s counterintuitive to charge a tax when one uses less of something, then we should try to guess why a major bank with billions of dollars loaned out for office building properties would propose such a tax.  Why would they want a financial disincentive for working from home?

[teacherwithamustache]

On the opposite end of the spectrum.  I would gladly pay a 5% tax or a 5% cut in pay (Heck even both). To never have to go into my work place again.  I love virtual teaching.  It is easier for me to teach this way.  I would honestly let you cut 30% of my pay to teach from home for the next 9 years until I retire.  Dont cut my benefits or pension funding amount but my pay could be cut 30% easily.

[mizzourah2006]

I'm surprised so many are against this. Think of it as a form of privilege tax.

I just saw a really good quote:
"There was never any lockdown. There was just middle-class people hiding while working-class people brought them things."

so much truth to this.

[dashuk]

"There was never any lockdown. There was just middle-class people hiding while working-class people brought them things."

There is a lot of truth in this.

However excuse me if I'm cynical when it is being proposed by a company which manages €50bn of real estate investments (much of which will be city-centre office space).

(ETA, oops, missed desk_jockey's post making the same point.)

If your aim is to address inequality and provide a safety net, tax rich people, not "group which statistically contains more high earners but also lots of low earners".

[ender]

I'm surprised so many are against this. Think of it as a form of privilege tax.

It's all about what it incentivizes.

Should the government be encouraging commuting? Should the government be encouraging more and more congregation into dense urban areas? Should people who can work remotely subsidize industries?

[mizzourah2006]

I'm surprised so many are against this. Think of it as a form of privilege tax.

It's all about what it incentivizes.

Should the government be encouraging commuting? Should the government be encouraging more and more congregation into dense urban areas? Should people who can work remotely subsidize industries?

What about if the tax went towards a UBI? I see it as subsidizing employees in all the service sectors that won't be used. I'm not normal, when I worked in an office I brought my lunch pretty much every day. But all my friends ate at the cafeteria or went out to eat almost every day. They all eat from home now. There's a lot of service-oriented businesses that will go under if WFH is the new norm long term.

[SotI]

"There was never any lockdown. There was just middle-class people hiding while working-class people brought them things."

However excuse me if I'm cynical when it is being proposed by a company which manages €50bn of real estate investments (much of which will be city-centre office space).

Valid observation. My big corp employer has decided already to scale down on office space permanently. I wouldn't be surprised if that becomes a bigger trend that will hit RE-based revenues mid- to long-term.

[the_fixer]

Generally we place a tax on something to recoup the cost of using it; tax on gas to help pay for roadways/maintenance, tax on property that goes to local schools and emergency services, etc. In this circumstance we're taxing people who are using less of something to recoup the cost of it. What?

That is one reason that we place a tax on something. Another reason is to encourage or discourage certain behaviors. 

havregryn and others have pointed out some valid justifications for such a tax.  But if it’s counterintuitive to charge a tax when one uses less of something, then we should try to guess why a major bank with billions of dollars loaned out for office building properties would propose such a tax.  Why would they want a financial disincentive for working from home?

That was exactly my thought as well seems like a ploy to prop up commercial real estate.

Commercial RE will likely suffer as people switch to working from home and covid has shown that companies can save money and still get the work done. If they tax it and make it less attractive then companies will continue to rent / lease / buy commercial RE to employ workers in an office.

WFH is a large additional cost already for employees, I know my cost has skyrocketed this year while working from home.


Sent from my iPhone using Tapatalk

[dashuk]

What about if the tax went towards a UBI?

Why is this a better way of raising the tax revenue to fund UBI (which I am in favour of) than taxing high earners?

[mizzourah2006]

What about if the tax went towards a UBI?

Why is this a better way of raising the tax revenue to fund UBI (which I am in favour of) than taxing high earners?

I'm not saying it alone is, but I think people have an unrealistic approximation of just how many high earners there are in the US and how much UBI would cost. If we assume the cost of UBI that Yang quoted as ~2.8 trillion and we assume we have ~1.5 million individuals that make over 500k/yr (i.e. high earners) and we assume their average income is ~1-2 million and we assess an additional tax of 10% on their total annual incomes to specifically towards UBI we've now paid for ~5-10% of the cost of UBI per year.