In the long term though, if companies go remote I don't see how they can continue to have salaries based on cost of living. In a hypothetical perfectly frictionless economy with perfect competition, companies that pay salaries based on the value contributed by the employee would be more efficient and outcompete those that paid based on the employee's expenses.
Your expenses don't matter to employers, but if the industry goes fully remote we'll no longer see labor markets with shortages and higher offers.
This is indeed a complex categorisation. What really defines my location in relation to remote work? Since I’m not bound to one physical location anymore I can split my time between different places. I might move every 6 months, what then?
People have a different, long-term relationship with the tax authorities because 'you're not going anywhere' and this makes it possible to settle at a later time. Also tax authorities take action in retrospect specially because things are difficult to prove on-the-spot, but Facebook will need to pay you next month and next year you might be working somewhere else. How will they be able avoid over/underpaying you?
https://www.bloomberg.com/news/articles/2020-05-12/stranded-...