Edinburgh’s Tourist Tax Is The Perfect Taxation – Of Those Without The Vote

As Colbert pointed out the art of taxation is to gain the maximum of feathers with the least hissing from the goose. The hissing that politicians so dislike being those with the vote to stop them being politicians in the future. So, the perfect form of taxation is of those who don’t have the vote. At least, those who cannot vote against the politician who has just taxed them.

This is what makes tourist taxes such a joy. As Edinburgh is just finding out, a tourist tax – apparently at least – harms no one at all that can vote for the City Fathers imposing the tax, it’s perfect.

E

dinburgh will follow in the footsteps of Barcelona and Paris to become the first UK city to introduce a “tourist tax”. Visitors to the Scottish capital face an additional £2-a-night charge per room for the first seven days of their visit. The charge, will would apply to all accommodation apart from campsites, is expected to raise up to £14.6 million a year for the city.

That that’s £15 million that will be pissed away is obvious. But none of the people paying it directly will have the vote, so it is that perfection described by Monty Python:

The problem with it of course is that the people who really pay the tax aren’t those handing over the money. For such a tax will, at the margin, lead to fewer people visiting Edinburgh. Which means a loss for all those who would serve or sell to visitors to Edinburgh. And there’s no guarantee at all that the loss from that will be smaller than the £15 million. There’s not even a guarantee that the tax revenue loss will be smaller than £15 million.

Politically perfect and economically dubious at best. This explains so much that is wrong with the world….

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Bernie G.
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Bernie G.

Ambivalent – don’t travel much these days. I suppose two-quid on a £300/night room is neither here nor there, but it’s a ten percent mark-up on a bed in a hostel for young (student) travellers. As the latter probably don’t spend enough during the course of their visit to justify clogging up the pavements and getting under everyone’s feet, it could be a vote winner with the locals?

BarksintheCountry
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BarksintheCountry

Best to kick the camel’s nose now. Soon, the pols will change the tax to a percentage of the room cost, then another taxing body will add its toll and soon the couple pounds will have grown to something substantial. Most tourist desirable places in the US have these fees, some in the neighbor hood of 20% of room rate.

Martin Sewell
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I would have thought that a tourist tax is appropriate if and only if tourists generate a net negative externality.