Story at a glance

  • A new economic report issued by Deutsche Bank asserts that workers who work remotely are enjoying better economic gains than their commuting counterparts.
  • Many offices will not be reopening until mid-2021.

The remote working and learning taken as a preventative measure against COVID-19 transmission has rendered millions of Americans housebound. Offices, schools and other public working spaces have been closed for months as the pandemic rages on.

A new report commissioned by financial giant Deutsche Bank proposes that for individuals who continue to work from home rather than in an office, a 5 percent income tax should be levied to support lower income workers who do not have the opportunity to stay home.

As part of its “Rebuild” report, Deutsche Bank calculates that the average worker would not be any worse off by paying this tax because of the costs saved when working remotely, Business Insider reports.


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The hypothetical tax has the potential to generate $49 billion per year in the U.S., as well as 20 billion euros for Germany and 7 billion pounds in the U.K.

Its goals would be to help support lower-wage workers who must return to their offices daily despite the global health crisis.

It notes that the self-employed and lower-paid staff should be excluded from the tax, and only apply in countries where the government has not instructed people to work from home.

In the U.S., the Centers for Disease Control and Prevention (CDC) has not formally ordered all work spaces be shut down amid the pandemic. It does offer tips on how to protect staff and slow the spread of COVID-19 around office buildings.

"Working from home will be part of the 'new normal' well after the pandemic has passed. We argue that remote workers should pay a tax for the privilege," Jim Reid, research strategist at Deutsche Bank, said in the report.

A 5 percent income tax for remote workers is justified primarily from the money saved between transportation and food, as well as the added flexibility working remotely creates.

"That means remote workers are contributing less to the infrastructure of the economy whilst still receiving its benefits," the report's authors wrote.

Using a salary of $55,000 as an example, if the 5 percent tax was levied on this individual, it would amount to about $10 per day.

These additional funds could go toward covering costs for low-income workers who are obligated to come into a physical workplace.

"The $48 billion raised could pay for a $1,500 grant to the 29 million workers who cannot work from home and earn under $30,000 a year," said Luke Templeman, of Deutsche Bank. 

"For the first time in history, a big chunk of people have disconnected themselves from the face-to-face world yet are still leading a full economic life,” he added.

Many workers in lucrative fields, including those employed in technological and financial companies, have had an easier transition working from home than employees who work at locations like restaurants and department stores where physical presence is part of the job. 

A large swath of companies have decided to delay their returns of office spaces, with companies like Google, Uber, Airbnb, Slack, Target, Microsoft and The New York Times delaying office reopenings to summer of 2021 — an estimate of when a COVID-19 vaccine will be widely distributed.

“I hope this will offer the flexibility you need to balance work with taking care of yourselves and your loved ones over the next 12 months,” Google’s CEO Sundar Pichai wrote in an email to employees about potentially returning to offices in July 2021, per The New York Times.


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Published on Nov 11, 2020