- Economists at Deutsche Bank propose a work from home tax to support low-income individuals
- Proposal is widely opposed, but proponents say it’s necessary to maintain economic stability
- Are WFH expenses tax deductible?
A report released earlier this month by Deutsche Bank suggested establishing a new work from home (WFH) tax to offset unpaid expenses during quarantine and support low-income individuals who did not have the opportunity to WFH.
The proposition was met mostly with outrage from nervous telecommuters, but the few who support the idea argue that this tax is necessary for maintaining our current economic infrastructure, one that was based on in-person work. Luke Templeman, strategist at Deutsche Bank who led the movement on the proposal, said that WFH “ is a big problem for the economy as it has taken decades and centuries to build up the wider business and economic infrastructure that supports face-to-face working.” If WFH employees are not contributing to the economy in this fashion, they’re contributing to the collapse, he went on to say.
Deutsche Bank priced the tax at a “modest” 5% on all income earned on days worked from home. If implemented in the United States, this could raise up to $48 billion; the Bank suggests directly converting such funds into $1,500 stimulus grants for the 29 million workers earning under $30,000/year and are unable to perform their jobs at home. “For years we have needed a tax on remote workers – COVID has just made it obvious. Quite simply, our economic system is not set up to cope with people who can disconnect themselves from face-to-face society,” Templeman said.
Telecommuters feel the fee is not a tax but a penalty on remote working and are frustrated that the proposal puts the onus on individuals rather than the cities and states to bear the financial burden of unused infrastructure (public transportation, office buildings, etc.).
The Deutsche Bank proposal resurfaces other alarming tax inquiries for WFH employees. The IRS states that: “Employees who receive a paycheck or a W-2 exclusively from an employer are not eligible for the deduction [unreimbursed employee business expenses], even if they are currently working from home.” This is a change from the 2017 tax overhaul which did away with this option for miscellaneous deductions.
Working from home might be our safest option right now, but is it the cheapest? Share your thoughts with us via email or call us at 516-541-6549 and check out our DSJ COVID-19 Information Center to speak with a member of our Coronavirus Response Team (CRT).
Sincerely,
Devin McQuillan
Associate, Creative Solutions
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