I like the idea, but not the implementation. I think it should be done as a tax credit for the employee or the company instead.
Doing so creates positive incentives for companies to hire remote workers in California. Requiring the company to pay up by force of law disincentivizes companies from hiring remote workers in California.
I also think that it would be more equitable since an employee’s home office setup belongs to them and not their employer.
The consequence is that the company will want to improve efficiency by paying for all the utilities for all employees in a single building. E.g. less WFH.
Because i want a job and not an incentive to not hire me because i don't work locally to their office.
I get frustrated at arguments like this that effectively result in "hey, you need to move to a big city because it's 'better' for you". I don't live in a big city right now, i work remote, and i'm thankful that employers aren't punished and incentivized _not_ to hire me.
I get what you're saying, but we need to look at the ramifications of purity arguments like this. Killing WFH "for my own good" doesn't feel as good as you may think it is.
Work expenses paid for by an employee are typically tax deductible. This wouldn't be anything new. The expenses paid for by an employer are also tax deductible. This would also not be anything new. The idea isn't that the "cost" is borne by the taxpayer, it is that the employee/employer shouldn't pay a tax on the money they used to produce the income.
The upthread proposal was "I think it should be done as a tax credit for the employee or the company instead."
That's a proposal to have the cost be borne directly by the taxpayers (a tax credit), not a mere reduction of profit via a valid business expense (a tax deduction).
> The expenses paid for by an employer are also tax deductible
This is no longer true, at least with regards to employee salaries, but maybe other expenses related to their employment are still deductible. Since the headline calls this a "reimbursement" I would imagine it would be
Encourage WFH and then the company doesn't need to pay for an office building at all! It's almost like businesses have to pay for infrastructure for the employees to be able to do their jobs, whether it's in an office park downtown or the home office in the suburbs.
That'd be totally logical if there wasn't a large amount of investment money tied up in commercial real estate - we've seen a deluge of articles about how detrimental WFH is and many of these are coming from investment firms tied to commercial real estate. We're currently losing the battle of advocating for WFH even though logic is on our side - we don't need to give investors more ammunition for the propaganda mill.
The purpose of it being a tax deduction is because it is a productivity cost. By spending that money, you are producing (hopefully!) something useful for others.
Of course, there are loopholes, this model breaks down when you're talking about deducting a random boat you take clients out for fun. In this case we're talking about remote work.
I think that the taxpaying public receives benefits from the remote work arrangement; such as less traffic, noise, pollution, and consumption of public resources such as roads.
Lots of cities disagree with you- they want people to return to office because they're worried their down towns are going to collapse due to lack of office workers.
They'll still fail because they won't be able to twist employees enough to reach the minimum footfall floor required for the economic activity needed to sustain before times downtowns, but it will be annoying while they try.
Mayor of NYC complains about remote work, but then expands it to non union NYC employees because they can't retain talent [1]. Mayor of Minneapolis complains Target and the local county won't fully RTO, but leadership at those orgs goes "meh" and continues because they want to retain talent [2] [3].
This does not work differently in other states as far as I’m aware, California just might be more willing to enforce the laws already in place. Additionally, this not a tax credit which is money owed to you by the tax authority, rather a deduction which is a very standard vehicle in calculating net income (revenue minus costs). Who takes deduction doesn’t matter as far as the IRS is concerned, for example, as long as it’s not claimed twice. As an employee, I would rather be reimbursed for company expenses than have to manage those deductions throughout the year because part of the benefit of being W-2 is that you don’t have to worry about anything except collecting that paycheck. If I we’re on a contract, I would be managing my own expenses.
> Who takes deduction doesn’t matter as far as the IRS is concerned
Strictly speaking, if we're talking federal taxes, then post TCJA the IRS does care who takes the deduction. W-2 employees can't deduct expenses like that anymore. Not that big a deal for Internet costs, but it hits some professions pretty hard (e.g. professional musicians where the instrument is quite expensive relative to their income).
I kind of like the idea of a simple tax system, but on the other hand it's one of the best levers that the government has for influencing behavior. As long as the tax incentives correctly line up with the behaviors we want to promote or discourage, I think it can be a really good thing.
That said, I think it should be more on the business than on individuals. Individual taxes should probably be handled nearly entirely automatically for most people, with nothing more than an approval step required.
That's literally NOT the purpose of the tax system. We tax people to pay for government expenses. Encouraging/discouraging behavior through taxes is very popular in the US, but not nearly as much in most other countries.
It depends on the level of government and their sovereignty. If the government controls it's own currency, the purpose of taxes is not to pay for expenses, but to provision the government, create a demand for that currency, and create markets. Sovereign governments are in a perpetual state of deficit on purpose.
Governments in the Eurozone are not Sovereign because they don't have control over the currency and must use taxes to pay government expenses.
US states and cities also must use taxes to pay for government expenses.
So the real answer is complex, it depends on whether you are a sovereign government or not.
True, but America's history means that it has a relatively weak and slow federal government. Tax initiatives are some of the fastest things one can pass on the federal level.
Depends on the level of government. For cities and states, taxes generate revenue, but for the federal government, taxes serve a different purpose because the US federal government is sovereign and controls it's currency.
This following is an excellent short video from the late David Graeber explaining why money is debt and what taxes do. While it's context is the UK, it applies to US or any sovereign government.
For California it's absolutely about revenue. But a dual purpose is to provide incentives/disincentives for certain behaviors. Even states that require taxes for revenue give tax breaks for incentivizing certain things to companies and other groups.
At the federal level taxes serve to mainly provide a demand for the currency, control the levels of money in the broader economy, and incentivize/disincentivize behavior. Unlike cities and states, the federal government must necessarily be in a perpetual state of deficit for the private sector to have a surplus.
To further back up Gaeber's claims, here is a reference from the Bank of England explaining how money is created.
Right, this will also disincentivize companies going folly remote, since this is eating into their savings for not having an office. Companies only have to pay this expense if there is no option other than remote.
Doing so creates positive incentives for companies to hire remote workers in California. Requiring the company to pay up by force of law disincentivizes companies from hiring remote workers in California.
I also think that it would be more equitable since an employee’s home office setup belongs to them and not their employer.