Taxing the sky hurts consumers

As the back and forth on Brexit dominates political debate in the UK, the European Union, as ever, is working on new ways to make everyday life more irksome, intrusive, and overpriced.

In May last year, the Belgian newspaper De Standaard reported: “here and there, it is suggested that environmental and health impacts should play a role in the introduction of a European minimum excise duty on kerosene”, which is Brussels-speak for: “this is going to become a proposal in the near future”. Now the proposal is on the table.

The Dutch government is suggesting a €7 air travel tax on all flights to and from the EU. Even after the United Kingdom leaves the bloc, this will have just as much of an impact on British consumers and companies as it will on everyone else.

According to The Hague, Europe has a problem with too many low-cost leisure flights, and a tax would reduce the incentives for this consumption. Dutch secretary of state for finance, Menno Snel, also points out that the measure would bring in €200 million for the Treasury. But you can be sure that those two things are completely unrelated – the proposal is clearly all for the good of the environment.

France, Belgium, and Finland are now supporting the Dutch proposal in the European council. Luxembourg said that it would not oppose the tax if all member states get on board. But the selection of countries coming out in favour of the measure is telling. In Helsinki, you’d be hard-pressed to get a pint of beer for €7, but in member states such as Poland, Croatia, or Romania, this is a lot of money. Not coincidentally, the countries whose citizens can already afford this kind of travel are not going to be the hardest hit. There is a clear east-west divide, yet it’s just brushed over as an irrelevance.

Take a practical example. You can now book a return flight in May from London Luton to Kraków, Poland for a total of £65. Since the tax applies per flight segment, you’d have €14 added to your total bill, or almost 20 per cent of your total ticket cost. This is a considerable part of the price and could be devastating for low-income consumers looking to visit their family, partners, or attend a funeral or wedding. Moreover, taking money off consumers while government officials jet around in business class is not merely upsetting, it’s crass.

Of course, this isn’t a new form of lobbying. The European Federation for Transport and Environment (T&E) has long argued for increased taxation on air travel. The group calls air travel “undertaxed” despite taxes having risen in the last seven years. Here, again, the environmental argument doesn’t seem to be the only one in their sight:

T&E analysis has found that new measures such as a carbon tax on motor fuels, aviation kerosene duty, and ending the VAT exemption for flights within and from Europe would raise more than €50 billion annually.”

However, as it’s a tax proposal, it needs the unanimous approval of member states in order to pass, and could, therefore, be blocked by states with a lot of low-income consumers, tourist destinations, or countries such as Ireland which host low-cost carriers like Ryanair.

The question is whether those countries will negotiate trade-offs on other projects, or perhaps they may even feel bound by the 2015 Paris climate change agreement to approve the measure and then blame it on the bureaucrats in Brussels.

The whole debate, however, raises a serious risk that air travel will increasingly fall victim of the environmentalist police, whose bans and taxes are bound to start affecting consumers very soon. They should be stopped before it is too late.


This article was first published by 1828.

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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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