October 23, 2000
Gore to go by Greyhound
NOT JUST WAR
of the constant themes of my columns has been that the internationalising
tendency has not just led us into needless wars or sovereignty limiting
trade agreements, but that foreign affairs are now becoming domestic.
In Britain imperial measurements like inches, pounds and gallons
are now illegal. Why? The European Union told us to make them illegal.
Before you ask, parliament has yet to vote on the laws that are
already in effect. British farmers are limited to producing 85%
of British milk consumption so that French dairy farmers can have
a market. In Ireland, an inflationary boom has been met with a very
low interest rate because the German economy is weak and the Irish
now share a currency with those Germans. To paraphrase the feminists,
the international is domestic.
doesn't just apply to Europe, but to America as well. In addition,
it could seriously affect your standard of living. For the European
Union want to increase the taxes that Americans pay for their aircraft
fuel. The first question is how can the Europeans do this? Well
there is an agreement, the 1944 Chicago
Convention, which prohibits us from taxing international
aviation fuel. If the government so strongly wishes to tax aviation
fuel then surely they can negotiate their way out of the convention
and then impose it unilaterally. That is not what they want to do,
however. They want all the countries of the world to tax it together,
and tax it at an enormous rate.
admission that this is a serious plan by the British government
came up in the British House of Lords. The government spokesman
said that they would put tax on aircraft fuel, but only after the
Americans had agreed to do the same. Here is what he said:
a point of fact, we are bound by the 1944 Chicago Convention and
subsequent protocols that forbid us from taxing aviation fuel. That
is the basis on which we have to work until we have persuaded countries
internationally to tax aviation fuel.
right, in the rather convoluted prose of Lord McIntosh of Haringey
they want to "have persuaded countries internationally to tax aviation
fuel" rather than impose the tax internationally. That's America.
PLATFORM SAYS THIS?
a second, in the middle of an election year don't you think that
this would be mentioned? After all the man who makes treaties is
the President of the United States. And he could be making taxes,
which would be massively unpopular. If you think that the tax on
aviation fuel will be a modest one or two percent, think again.
In answer to another question on smaller planes, the sort of tax
that they are thinking of becomes clear:
change to relative taxation of av gas, which the noble Lord uses,
and the kerosene that jet engines use would be towards higher taxation
for jet engine fuel rather than lower taxation for petrol engine
right, the move will be towards the British rate of petrol tax (although
I doubt that it will quite get there). How high is that exactly?
Well seventy three percent when I last looked. Think about it. Three
hundred percent if you look at it from a pre rather than post tax
perspective. That means that the price of fuel would be quadrupled.
So every dollar paid for aircraft fuel will then have to be four.
Now, as I said, I see little prospect of aircraft fuel tax getting
quite that high, but the ceiling isn't exactly low. So what
are the candidates positions on this?
this is a serious policy. The British Government have admitted that
they are pursuing an international campaign to tax fuel. This is
what Lord McIntosh, a government minister, said on Thursday:
Government support on environmental grounds the removal of the international
ban on the taxation of aviation fuel. We shall continue to pursue
the issue in the forum of the International Civil Aviation Organisation.
to some extent that's fine. In a democracy, it should be the governments
that decide their own taxation limits. That is not the intention.
In the next sentence he says:
Financial Secretary to the Treasury has made it clear that the Government
have no plans to take advantage of the European Commission's proposal
to allow member states to opt to tax aviation fuel used on domestic
flights and on flights within the EU.
they will not tax although they want to. What's up with that? Well
the answer is tax competition. That healthy state of competition
that means that the economies that let their people keep the most
money will grow the fastest. It has a wonderfully bracing effect
and naturally, the governments that are so keen on competition policy
want to form into a cartel on taxes. Here is what McIntosh said:
an independent study commissioned by the European Union confirms
that taxing aviation fuel only in the EU would have very little
environmental effect and would discriminate against British and
and compress, "an independent study ... confirms that taxing
aviation fuel only in the EU ... would discriminate against ...
European carriers." This leads to two conclusions, firstly
Lord McIntosh is not a wordsmith and secondly that they want to
tax you. If you are in any doubt here is what he says near
hope that I have made it clear that there are significant disadvantages
in Britain or the European Union going it alone.
is the situation. Britain (and presumably the EU) wants to impose
taxes on aviation fuel. They do not want to impose taxes in Europe
alone. This can logically mean only one thing, that they want to
impose taxes internationally. Internationally means America. Although
it is not stated in this exchange, the British government has said
that they want this agreed in the autumn
of 2001, well within the next four years. Therefor under the
next presidency, they will want to increase significantly the price
of airline tickets through this tax. So, who knows about it?
will really suffer? Obviously, it will be the flights where fuel
is a large part of the budget. As the amount of fuel is fairly constant
then it will be those flights that don't have much in the way of
stewardess service or free drinks. Low margin flights. Which flights
have the lowest margins? Internal flights. Which country has the
most people flying internally? The United States. You will see the
poor, and to use Al Gore's phrase "working families", being taxed
on to Greyhounds. This tax will also tax those businesses that have
to move executives around the country quickly, a tax on business
and economic efficiency. Surely a tax like this would be roundly
condemned or stoutly defended. So what are the candidates saying?
A DICKIE BIRD
a search of the web sites reveals more than intended. Using the
simple search "aviation fuel tax" the Bush
site comes with the message, "Your search returned no results."
Not surprising really, but then the Bush campaign are not always
the best at finding a winning issue. I then went to Gore's
website. The search (when choosing all rather than any terms)
came up with the equally illuminating "Sorry, no matches were found
containing aviation fuel tax." So why the mute button? Is
this a new idea? Well, no it has been on the table from the UK at
least since 1999, and its been touted by the OECD since
1997. Is it going to have a small impact? Quadrupling fuel prices,
doubling the price of some budget flights, what do you think?
WILL FIGHT (FOR) YOU
course, you can rely on fighting Al. His book "Earth in the Balance"
came up with such classics as the plan to eliminate the motor car
in 25 years time (so he has another 17 to go). Is this a man to
stand up for the small company sending a negotiating team to a big
customer, the working families on holiday, the job seekers? Not
Al it seems. This new tax could have a massive effect on the American
way of life and it will be done by treaty. At the very least, the
presidential candidates could let you know where they stand on this.