Cui Bono? This time in Australia.
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Incentive Taxation

Cui Bono? This time in Australia.







The Australian Capital Territory is rapidly becoming the state government most willing to experiment with forms of taxation that serve the interests of both the public, fair play, and economic logic. Generally, it is trying to move away from taxes that burden workers and business and crater the economy to a more classical approach of its self funding cycle of revenue.

Case in point:the ACT has committed to a very ambitious light rail program, expected to boost the regional economy dramatically in the coming decades.needless to say, it's going to cost a lot of money. Usual strategy for funding is to borrow and tax. The tax is usually spread out as thinly as possible (say in the sales tax) so that nobody notices that they are paying extra in this post-recessionary era.

Who benefits from light rail? Certainly, the users who will be paying part of this share of the cost of the farebox. Who are the hidden beneficiaries? Cui bono?


Landowners naturally. The Property Council, a lobbying group devoted to protecting the interests of landholders is objecting to the proposal that at least some of the project be paid for by a levy on the increased land values surrounding the transport nodes.

Quoting from the article, were results of other studies in Australia indicating that:
It points to work by James McIntosh at Curtin University, who investigated value capture options for Perth transport, which found that homes in rail corridors (400-800 metres either side of the track), increased in value by 5 to 25 per cent per cent, and some commercial properties skyrocketed by more than 50 per cent.

in fact, the transit users make the landowners wealthy by using the service that the late rail provides. The landowner has done little if any to increase the value of their holding. The public increases the value of the holding by their investment and tax dollars and their increased presence on the sites thereby increasing the desirability and utility of that land. The land is no longer at the margin.

We'll follow this story, and hope that the ACT government sticks to its guns.

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