Why a ‘Work from Home’ tax is wrong

With the recent changes to the workplace due to the global pandemic of Covid-19, there has been a change in how we work. Most people are now working from home in professions such as administration, secretarial and other forms of office work. Because of these changes in the workplace, some people have decided there should be a new tax to reflect the changes of modern work.

This idea of a new tax has come about due to the lack of tax income from the pandemic. Workers are commuting less, therefore not using many services such as transport. Local businesses based around their own workplace are also receiving less revenue, leading to a decrease in revenue tax for many economic centres such as the city centres or high streets.

The gap in revenue for the public purse has therefore led to many economic experts and tax advisers to suggest a ‘work at home’ tax to help fill this hole, with big left-leaning news outlets such as The Guardian expressing strong support for this proposed scheme. The Guardian, citing an economist at Deutsche Bank, stated that the British government should implement a 5% income tax on daily earnings. This has been projected to rise up to £7 billion in tax revue for the country.

However, I must say this idea seems to be a very short sighted reaction to fix the economic consequences of the coronavirus. The idea of taxing people who have started to work at home for their own protection seems to be more of a punishment for people who are taking responsibility. It overlooks how much potential there is of having a more widespread economic base and giving more opportunities for people to pick their own workplace.

With the ability to work from multiple locations rather than a central location such as an office, it allows the economic value of the whole country to spread across the country – reducing the centralisation of industry in locations such as London, Manchester and Birmingham and redistribute some of its capacity into the more rural and less developed areas of northern England and elsewhere in Britain. This can greatly improve the economic opportunities in these areas, such as creating new businesses to cater for well-payed individuals that have a larger disposable income – which is benefited by avoiding the expensive costs of city life and commuting. It also can give local councils a new source of tax revenue in the future.    

Introducing a new ‘work at home’ tax would discourage many people and businesses from allowing people to work at home. thus hindering the future redevelopment of many rural and underdeveloped areas. It would firmly enforce the status quo of the disparity between rich and poor.

Overall, the idea of a new tax on people who choose to work at home is just a money grab for governments thinking in the short-term. Allowing more people to work at home without penalisation can give great benefits to individuals regardless of class, making growth all around the country and the prospect of a more equal society likely.

Featured image credit: Manny PANTOJA on Unsplash

Advertisements