this post was submitted on 04 Dec 2023
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It seems silly to incentivise long commutes.
Why pay someone that drives an hour each way more than someone that cycles to work in twenty minutes?
In that example, based on a wage of £20ph, the driver would be earning £6,666 per year more than the cyclist, that's nearly an additional £300,000 over a 45 year career.. You'd be an absolute idiot to not sell your house and move as far away from your work as reasonably possible.
People always bring up this objection, but it's extremely solvable: just pay employees for their travel respective to the median commute time for that area. Sure, people who live close get a little bonus and people who live far away get slightly less; but it removes all impetus to game the system and helps people who need it.
Germany kind of does that... When you file your taxes, you claim the "Pendlerpauschale", which is, roughly translated, the commute lump sum. For the first 20 kilometres between home and work, people get 30 cents per km, any km after that gives you 38 cents.
It kind of works in the sense that the money you spend to get to work is more or less evened out. It is also paid regardless of your means of transport, so cheaper means (such as bicycles or trams) are incentivised by potentially making you some money in return. However, this is still far from an hourly wage... We're talking about a few hundred euros, maybe a few thousand per year if you have a long commute.
If you used the median time and would force employers to pay a wage I really don't get how you would either prevent people to move further away (if you have worker protection laws) or people being fired for living too far away (if you live in the USA). This would also make it far more profitable for higher incomes to commute, which seems kind of counter-intuitive as they are probably the ones who need it the least and who would be able to just move to a new home if they wanted to.
But you don't get paid the "Pendlerpauschale". You can only deduct it from your taxes.
Let's just hope that if you travel eighty kilometres to work you'll earn enough for this distinction to no longer be relevant?
That would mean paying a marginal tax rate of 100%. The maximum marginal tax in germany is 45%, if you make more than €277000 per year.