A proposal to tax working from home has gotten some attention this week. You can find a description of and case for it on pp. 32-34 of this DeutscheBank report.
Here’s how it would work:
[T]he tax will only apply outside the times when the government advises people to work from home (of course, the self-employed and those on low incomes can be excluded). The tax itself will be paid by the employer if it does not provide a worker with a permanent desk. If it does, and the staff member chooses to work from home, the employee will pay the tax out of their salary for each day they work from home. This can be audited by coordinating with company travel and technology systems.
So, easy-peasy. Not an administrative nightmare at all.
Moving on, what’s the justification for this tax? It’s not at all clear. The report, admittedly short, hints at some possible justifications.
People who can work from home are well off, lucky, and can afford it. That may be true in the aggregate, but it doesn’t mean that working from home is a good proxy for being well-off or lucky.
The revenue raised could be spent on a lot of good things. Okay, but that’s an argument for any tax increase, not for a tax that singles out working from home.
People who work from home “are contributing less to the infrastructure of the economy whilst still receiving its benefits.” The author, Luke Templeman, is not clear about what he means by “infrastructure.” If it’s roads and bridges, for example, as the traditional usage would indicate, this is backward: People who work from home are using that infrastructure less than people who go to the office, while still paying nearly as much for its upkeep.
The report sometimes suggests that what is meant is something more like: They’re not sustaining economic activity such as restaurants in city centers, dry cleaners, and so forth. But this is also baffling. If you bring your lunch to the office instead of stepping out, should you also pay a higher tax? What if you launder your own shirts?
All in all, this tax seems like a bad idea.