What the Dutch airtravel tax proposal reveals about our political class

The Netherlands is pushing for a new tax on air travel. The story is very under-reported in the media, even though it reveals something quite striking about the current political establishment.

The most important reason

Dutch Secretary of State for Finance Menno Snel presented a report to the Council of Ministers of the EU arguing for a €7 tax (per passenger, per flight segment). The Hague already collected such a tax for twelve years before abolishing it due to a considerable portion of travellers commuting to neighbouring Germany and Belgium to start their journeys there. This explains why the Dutch government wants to ensure that all EU member states introduce the same tax this time.

The Netherlands claims that the measure would be introduced as a means of curbing carbon emissions and to disincentivise the purchase of cheap flights. Low-cost travel is seen as unnecessarily polluting the air and contributing to global warming.

However, the real motivation behind the proposed tax quickly became apparent when Secretary Snel, in an interview with Politico, said that this tax would provide the Dutch treasury with some €200 million a year. With a current government surplus of GDP at 1.1%, one wonders where the sudden need to generate further income comes from. In the Netherlands, total spending is set to increase by over 75 billion euros in the next three years.

The reality is that The Hague is using an environmentalist excuse to levy yet another tax on consumers. France, Belgium, and Finland have now joined the Netherlands in calling for this airline tax.

Regressive taxation

The people most affected by this type of tax are low-income consumers, since their spending on goods and services is proportionally larger. Just imagine a Romanian family who would like to attend the graduation ceremony of their son studying in France (who took up student debt to afford the costs of living in a city such as Paris). At a price of about €50 for a round-trip flight to Paris with a low-cost carrier, the family spends €300 for both parents and a sibling to attend the ceremony. With the introduction of the Dutch airline tax, they would spend an additional  €42, knowing that the majority of the cost of their flight already includes taxes and fees (the fees also often being associated with supplemental taxes). That is a price increase of 14%.

There is a massive inconsistency in arguing that the VAT is a tax that hurts low-income consumers while having no qualms whatsoever in introducing indirect taxes that hurt low-income consumers, all under the guise of concern about climate change.

Arrogance

Worst of all, the people introducing the tax would be those least affected by them. Business travellers, high-income earners, even politicians, for that matter, either have enough resources to not be troubled by the tax or are simply not bearing the cost of  their own tickets. Also note that in Finland, which supports the tax, €7 is not enough to buy a pint of beer–a very different story in Romania, Bulgaria, or Croatia.

This proposal is the result of years of arrogant political policy-making at the expense of the poorest in society. Supporters of the tax view  low-cost flights as a luxury, rather than what they actually are: an opportunity for low-income households to afford travel that would otherwise have been unobtainable.


This article was first published by Values4Europe.

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About Bill Wirtz

My name is Bill, I'm from Luxembourg and I write about the virtues of a free society. I favour individual and economic freedom and I believe in the capabilities people can develop when they have to take their own responsibilities.

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