A Case for Remote Work
One overlooked policy from the Trump administration was the cap on state and local tax (SALT) deductions, passed as part of the 2017 Tax Cuts and Jobs Act. The deduction was capped at $10,000 and has primarily affected higher-income earners, especially those in cities in high-tax states such as New York City and San Francisco. While residents of cities in low-tax states are also affected by the deduction cap, it disproportionately affects renters in high-tax states, who don’t gain equity in their homes to offset the tax cost.
The Covid-19 lockdowns, the cap on the SALT deduction, and surging crime rates drove people from the cities to the suburbs. With a limited housing supply, Americans looked beyond typical commuting zones for their new place of residence. As residents fled urban rental units, suburban and suburban rents dramatically rose. Many Americans uprooted themselves and went further inland.
It is undesirable and inefficient to drive people away from dynamic cities and states. The greater New York City area and much of California used to house some of the nation’s critical industries. Today, people are eager to move away from these once-dynamic cities. California’s weather, coastline, and recreational opportunities aren’t enough to keep people in the Golden State.
It costs money and time to move to a new geographic location, set up your family, and establish a new social network. The less wealthy a person is, the more difficult it is for that person to move. Spending your or your children’s formative years in a state of limbo—looking for new housing, jobs, and social networks—is a deadweight loss to the economy for all but the most upwardly-mobile movers. It stifles innovation and entrepreneurship.
One solution is to ensure housing policy reflects the demand for housing. America has a housing shortage. The overpriced, artificially inflated housing market serves as a double-tax on the middle class. The government should crackdown on foreign investment in residential properties and make it easier for young would-be homeowners to avoid falling into debt.
More practically, however, another solution to the housing crisis would be to embrace remote work where appropriate. It would free up home buyers to move further away from urban hubs and have the effect of decluttering the suburbs, where housing prices are skyrocketing. One potential knock-on effect of embracing remote work would be a spike in the marriage rate and family size. Remote work gives young people the flexibility to move for a spouse and the ability to relocate as a family as circumstances demand.
A remote-work policy is a pro-family policy. It would save families both in terms of housing costs and time spent commuting, increasing a family’s quality of life. Parents who can do their jobs remotely can participate in their children’s lives without fighting against the twilight of the day. The policy benefits single people, too, as the flexibility of remote work would allow underslept, overweight, and indebted Americans a chance to right their respective ships.
It could also serve to realign commercial land for single and multiunit residences, which would allow for human-centric urbanism typical of the turn of the 20th century. One of the few features that make Washington D.C. and Austin, Texas endearing places to live is their neighborhoods are human-scaled. Imagine choosing to live in an area without worrying about arduous commutes or backed-up highways on the way to the office.
Congress should provide an income-tax deduction to home offices up to square footage for remote workers or implement a capped overall income-tax deduction for workers who spend three or more days per week working remotely. The Treasury may pull in less revenue from gas taxes, but Americans would burn less fuel, suffer fewer highway accidents, and incur lower car costs.
Remote work is not a panacea. Still, it would eliminate daily inefficiencies for workers. Their families’ quality of life would improve. For conservatives and progressives alike, remote work satisfies many of their social and economic goals: Conservatives get a pro-family policy and reduced government intrusion in the office space, while progressives get lower car emissions and more flexible work environments. Releasing the housing pressure cooker even a little will improve the quality of life for regular Americans. Reducing economic hardships on American families and young people will enable them to fully participate in building our future industries. Remote work is a step towards that goal.
Adam Korzeniewski is a Marine Corps combat veteran and a former Trump Administration official in the Treasury and Commerce Departments, who specializes in fiscal and economic policy, and national-security topics.
This article was supported by the Ewing Marion Kauffman Foundation. The contents of this publication are solely the responsibility of the authors.