A bed tax has been imposed on accommodation providers in particular areas of Sydney; one of its justifications is to help pay for the 2000 Olympic Games. This paper first sets out the nature and scope of the tax. The estimated impacts of the tax on gross state product, employment, investment and government revenue are then discussed. The paper then addresses certain issues which appear to have been neglected in formulating the tax. These include the effects of the tax on tourism visitations in total and by market segment; the question of who pays the tax; and the justification for the accommodation sector to bear a disproportionate burden in supporting the Olympics. The paper concludes that the tax is not good public policy.
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