Business rates are a good tax, argues Sam Bowman

Business rates are a good tax, Sam Bowman wrote in the Telegraph:

This year’s revaluation threatens to raise rates for London overall while cutting them everywhere else. It would be a revenue neutral change, but loss aversion means the businesses that will lose out are protesting much more loudly than the ones that stand to gain.

But economists, left and right, tend to think of business rates as a very good tax. Even though it’s businesses that write the cheque, they say, it’s landlords who actually pay business rates. When rates go up, rents go down by the same amount, and vice versa.

That sounds improbable to most people. But there’s actually quite a lot of evidence that it’s true.

Read on.