decision which means that 75 percent of taxpayers are going to be paying less in future is a sure political winner.

The bigger question is not whether this is a popular policy decision, but whether it is the right one.

It is also fair to say that a revision of annual rental values is long overdue after the last Government shelved the 1995 review pending an overall tax basis.

Land tax is one of the few progressive taxes in Bermuda. Then-Finance Minister David Saul introduced a scale of tax rates in the early 1990s, meaning homes with higher rental values are taxed at progressively higher percentage rates.

Now the new Government has taken this a step further; ARVs have not been increased in almost ten years and will therefore jump as rents have soared since 1990.

Most property owners would therefore expect to pay more, but Government has instead handed them a gift; all the tax rates are being lowered, but the size of the cuts narrows as the value of the home increases; thus about 75 percent of homeowners will see their tax bills fall and the top 25 percent will see them rise, even though the tax rate has dropped.

That is not necessarily a bad thing. Many owners of large homes have made spectacular amounts of money since the early 1990s by renting their homes for mind-boggling sums. This tax will see to it that other people in the community benefit as well, albeit indirectly.

But the Government should be concerned that such a move does not lead to even higher rents at the top end of the market; high rents at the top have tended to pull up rents throughout the market and this could make the Island's lack of affordable housing worse, not better. Furthermore it could act as a deterrent to executives who wish to base their companies in Bermuda and already find the Island too expensive.

Still, it is hard to complain too loudly about homes; land tax is a legitimate method of raising tax and there are provisions for those who have not benefited from the rental boom or who do not have large incomes to get relief.

Those people should be made aware of that.

Of greater concern is the fact that businesses are likely to continue to pay the current six percent rate -- but as ARVs rise, so will their tax bills.

This is fair enough for businesses which are highly profitable, but worrying for those involved in all aspects of the tourism industry which may be making small profits or suffering losses.

Unless Government intends to grant these properties a break, there is a good chance that those which are already marginal will opt to get out of the industry, or will go bankrupt.

Homeowners may be celebrating lower taxes on their homes -- but that will be little solace if they have no jobs to go to.