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Deutsche Bank says tax remote workers to rebuild COVID economy | United Kingdom News



The COVID-19 crisis is worsening inequality around the world as people fortunate enough to work remotely continue to earn a pay cheque while millions of others lose their livelihoods or risk their health in jobs that are deemed “essential” but pay low wages.

Now, one of the world’s biggest banks has proposed a fix to level the playing field and create a more inclusive economy as nations rebuild from the pandemic:

Tax remote workers.

In a report called “What we must do to rebuild” (PDF), Deutsche Bank suggests slapping a 5 percent daily tax on people who work from home and using the funds raised to subsidise the lowest-paid workers who are unable to work remotely.

“For years, we have needed a tax on remote workers – COVID has just made it obvious,” the report’s authors argue.

Deutsche Bank says that the 5 percent tax is justified because people who work from home “are contributing less to the infrastructure of the economy while still receiving its benefits”.

For years, we have needed a tax on remote workers – COVID has just it made it obvious

To understand what the bank is getting at, take the example of someone who used to commute from a suburb to work in a New York City office.

That person’s contribution to the economy starts before they even leave home when they choose an outfit purchased from a store that relies on people wanting to look smart on the job. Take away the demand for office wear, and that store and its employees are looking at some lean times.

If the office worker takes the train into the city, they need to buy a ticket, which helps keep public transport running and transit workers in jobs. If they crave a morning latte, they will swing by a coffee shop, which helps keep baristas gainfully employed, not to mention all the vendors who supply that coffee shop.

There are the security guards at the office building’s entrance whose jobs depend on people making use of that facility; custodial workers who earn their living cleaning it; people who make sure the office supply cupboard is stocked – and the list goes on.

The point is – office workers are an integral part of an economic ecosystem that has been built up over decades, so when they stop going to the office, it negatively affects a lot of businesses and jobs.

Considering the number of remote workers in the United States has increased ten-fold since the pandemic, and seven-fold in the United Kingdom, we are talking about a significant disruption.

A 5 percent tax for each work from home day would leave the average person no worse off than if they worked in the office

Meanwhile, remote workers are gaining tangible benefits in the form of higher savings, and intangible ones, like greater flexibility or an extra 30 minutes of sleep because they don’t have to put themselves through the tortuous grind of a morning commute.

“People who can WFH [work from home] and disconnect themselves from face-to-face society have gained many benefits during the pandemic,” the report found. “A 5 per cent tax for each WFH day would leave the average person no worse off than if they worked in the office.”

How is that possible? Deutsche Bank is assuming the average salary of a remote worker in the US is $55,000 a year. At that rate, a 5 percent tax works out to just over $10 per working day. That is the equivalent of lunch money for many workers in the US and Europe –  cash they are now saving if they do not have to go into the office.

Deutsche Bank reckons in the US alone, the remote worker tax could raise $48bn a year – enough to give a $1,500 grant to each of the estimated 29 million workers who cannot work from home and earn less than $30,000 a year – a pool that includes essential workers.

People who can work from home and disconnect themselves from face-to-face society have gained many benefits during the pandemic

The report also says the tax would only apply when governments are not advising people to work from home and would exclude self-employed people and low-income remote workers (insert a collective cheer from struggling freelancers). The tax itself would be paid by employers if they do not provide a worker with a permanent desk (see ya’ later, hot desking).

Deutsche Bank further argues that the tax has the added advantage of not propping up businesses that may never recover from the pandemic, but does help “the mass of people who have been suddenly displaced by forces outside their control”.

“Those who are lucky enough to be in a position to ‘disconnect’ themselves from the face-to-face economy owe it to them” to help”, says the report.

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Voters go to the polls in El Salvador | Elections News



Opinion polls ahead of Sunday’s vote show strong support for President Nayib Bukele’s Nuevas Ideas party.

Voters are casting their ballots in El Salvador on Sunday, as President Nayib Bukele’s Nuevas Ideas party is expected to make major gains in the legislative and local elections.

Long queues of voters wearing face masks due to the COVID-19 pandemic stretched outside of voting centres ahead of polls opening at 7am local time (13:00 GMT).

Salvadorans are choosing 84 legislators to represent them in the national assembly for the next three years, as well as 262 municipal councils.

Opinion polls released ahead of the vote showed Bukele’s party with around 70 percent support – and a strong chance of securing more than half of the mayoral positions and enough seats to hold at least a simple majority in Congress.

Bukele, who took office in 2019, came to power on a promise to root out corruption and offer an alternative to El Salvador’s main political parties, left-wing FMLN and right-wing ARENA.

ARENA currently holds 37 of the 84 seats in Congress and controls 138 of the 262 municipal councils, while FMLN holds 23 congressional seats and 64 municipal councils.

Tens of thousands of police, soldiers and international observers have been deployed to oversee the vote.

“We hope to have a peaceful election day, a truly civic celebration crowned by massive participation of the electorate,” Dora Martinez, president of the Supreme Electoral Tribunal (TSE) told national TV.

Earlier this month, the TSE called for international observers to be sent early after two FMLN activists were killed and five others were injured in a shooting in the capital, San Salvador.

Observers said it was one of the worst political attacks in decades.

Tensions have been rising ahead of the legislative polls, as civil society groups raised concerns that a strong showing for Bukele’s party could see him consolidate power.

Human rights advocates have said the president has shown authoritarian tendencies – an accusation that he and his supporters have rebuffed.

People vote during parliamentary and local elections in San Salvador on February 28 [Marvin Recinos/AFP]

With a majority in Congress, Bukele would be able to appoint judges to the Supreme Court and the public prosecutor’s office.

A two-thirds majority would let the Nuevas Ideas party appoint high-level government officials, such as the attorney general and five of the country’s 15 Supreme Court justices.

“I’m going to vote for [Nayib’s party] because he has helped us a lot,” Wendy Henriquez, a 46-year-old street vendor, told Al Jazeera ahead of the vote.

Officials expect preliminary results will be released a few hours after polls close at 5pm (23:00 GMT) on Sunday.

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