Thursday, February 26, 2004

Land tax in Merimbula: "'The owners of nearly every commercial building in Merimbula would be paying land tax of between $2,000 and $20,000 a year,' [Merimbula solicitor and property owner Mr Britten] said. 'This is passed on to their tenants in the form of higher rentals, and they in turn pass it on to their customers by increasing the price of their goods. 'So it is having an inflationary effect, and in that way no one escapes its impact.'"

This statement flies in the face of one of the best established principles in economics, that a tax on rent cannot be passed on but must be absorbed by the landholder. A land tax in fact simply collects the rent and deposits it in the treasury, resulting in less for the landholder and lower land prices.

"Mr Britten said that commercial rents here were reasonable at the moment, averaging between $200 and $300 per square metre per annum. "In Batemans Bay they can be up to $800 per square metre."

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