The city of Elysium is located on an island in the Nirvana River. Because of its desirable
Question:
The city of Elysium is located on an island in the Nirvana River. Because of its desirable climate it has attracted wealthy immigrants from all over the world. These immigrants have either built palatial new homes on the river waterfront or moved into luxurious residences, largely in high-rise buildings in the city's core.
In general, real estate values on the island are among the highest in the world. In order to protect their extremely orderly environment, the residents have prevented the development of any reasonably priced housing. To help maintain this environment the city has a large, well-trained security force.
The economic activity on the island consists of financial services, haute cuisine restaurants, and retail shops that feature high-end products from all over the world. Because of the high real estate cost, staff for these operations must live off island and commute in on a daily basis.
To accommodate residents of the island, the city operates a large heliport. This allows the residents of the island to quickly access a nearby airport where most maintain at least one private jet. Until recently, the only other access to the island was via a city-operated ferry. This service was provided free of charge by the city. While it was rarely used by the residents of Elysium, the staff of the various businesses on the island relied on it for access to their jobs.
Last year, the city completed a four-lane bridge to access the island. In order to finance the tremendous cost of this project, there is a $10 toll for each trip across the bridge. To ensure that the bridge produces adequate revenues, the city has canceled the ferry service
Required:
1) Evaluate the $10 toll on the basis of the qualitative characteristics of tax systems that are listed in your text.
Real Estate Finance and Investments
ISBN: 978-0073377339
14th edition
Authors: William Brueggeman, Jeffrey Fisher