Bad Budget ideas - taxing urban commercial landlords less
The latest trial balloon and yes, it’s an absolute stinker:
Rachel Reeves is exploring plans to impose higher taxes on Amazon as the Government races to support Britain’s ailing high streets.
The Chancellor is believed to be considering increasing the business rates paid by online tech giants as part of a wider shake-up on property taxes.
As part of a review of how business rates are set, Ms Reeves could scrutinise how much Amazon’s warehouses pay in tax compared to high street stores.
It comes as retail bosses have also urged the Government to impose new levies on deliveries.
One critique:
And yet, even if it plays well with the focus groups, we should also be clear on one point. An “Amazon tax” is a levy on the most innovative, dynamic and successful sector of the economy. In reality, it will be final confirmation that Labour’s Britain is a hostile environment for growing businesses – and so long as that is true we can forget about “growth”.
Fair enough. But the problem is worse than that. As we’ve pointed out many times over the years business rates are paid by landlords. Yes, the tenant hands over the cheque but the incidence, the pain, of the tax is upon the landlord. No, sorry, if you’re not prepared to consider tax incidence then you’ve no business commenting upon a tax system.
Taxing urban retail less and suburban big boxes more just shuffles which landlords make or don’t. Adding a consumer tax to online sales in order to reduce urban retail business rates shifts that tax burden from landlords to consumers. And why on Earth would we want to do that? Well, unless we were urban retail landlords that is.
We generally tend to think that we stopped running this country in favour of the landed property interest a century and more ago. We should stick with that idea and aim - really, why do we want to tax commercial landlords less?
Another way to put this. Business rates are the closest thing we’ve got - and it’s damn close too - to a Land Value Tax. That most efficient and lovely of all taxes. People are proposing that we do less of this? Rilly?
Tim Worstall