Privately collected taxes

From City AM:

RETAILERS at the Shepherd's Bush branch of London mall Westfield are facing rent rises, after [retailers] posted strong sales growth for the first six months of 2013.

Sales at Westfield London rose 1.9 per cent in the six months to the end of June, while sales at Westfield Stratford City – its east London cousin – grew 7.3 per cent.

"The retailers at Westfield London have had five years of trading now, they've been doing very well, and now it's time for the rents to catch up to the sales revenue," Peter Lowy, co-chief executive of the Sydney-based parent company, told Bloomberg yesterday.

Your business does well (whether through your own efforts or pure good fortune), so the government takes more publicly collected tax and the landowner takes more privately collected tax.

The only real differences are that taxes on income have no real justification and depress economic activity but rents are a rationing device for scarce resources. If there was unlimited land at each location then landowners would not be able to charge much rent, if any - a retailer would not be able to steal a march on his competitors by occupying the best spot.

The other difference is that the bulk of the taxes which the government collects are spent for the benefit of the people as a whole. The members of the government sadly nick a large chunk for their own private benefit, but the landlord takes the lot (minus a bit of tax) for his own private benefit.