# These Economists Want You to Pay a 5% Tax for Working From Home. Here’s a Better Idea

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If you’re one of about 40 million Americans working from home due to the coronavirus pandemic — that’s an estimate from Stanford University — you’re already familiar with the challenges it poses.

And if economists at Deutsche Bank had their way, you would get taxed for it, too.

”During the pandemic, the proportion of Americans who worked from home increased tenfold to 56 per cent,” the bank says in a study about how to rebuild the world’s economies after the coronavirus has passed. Remote workers who opt to stay home even after the pandemic subsides should pay, according to the study, a 5% percent “privilege tax.” That money should then go to low-income essential workers who cannot do their jobs remotely.

“The sudden shift to WFH means that, 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,” writes Luke Templeman, one of the study’s authors. “That means remote workers are contributing less to the infrastructure of the economy whilst still receiving its benefits.”

Working from home has advantages, the study says, compared to an office: you save on clothes and commuting, for example. That is the privilege that should be taxed.

The bank is proposing the tax should be paid by the employer if it does not provide the employee with a desk at the office. If it does, employees “should pay the tax out of their salary for each day they work from home.” Self-employed people and those who earn low incomes should be excluded, and the tax would not apply to “times when the government advises people to work from home.”

And while a 5% tax may seem like a lot, Deutsche Bank sees it differently. “We assume the average salary of a person who chooses to work from home in the U.S. is $55,000,” the study says, so the tax “works out to just over$10 per working day.” More or less the amount employees might spend on commuting, lunch and laundry each day, according to the bank’s estimates — leaving people “no worse off” than if they decided to go into the office.

## Bottom Line

There’s no chance that the federal or local governments in the U.S. would introduce a wildly unpopular tax on working at home. But there is a higher chance that federal income taxes might be raised, at least for some income brackets, as deficits rise.

That’s what Jill Schlesinger, a business analyst for CBS News and host of the “Jill on Money” podcast, told NextAdvisor recently, adding that people should take advantage of today’s relatively low taxes to save more for retirement. Schlesinger likes Roth IRAs, but whatever your chosen form of saving, now is the time to stick to it — if you are able to.

And that applies whether you are going into an actual workplace, or one of the 40 million Americans who are working at home during the pandemic.

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