Proposed EU flight tax has many flaws

Senate Majority Leader Harry Reid, D-Nev., has announced funding for the Federal Aviation Administration, so the agency will be able to resume collecting taxes on airline tickets.

But did you know that Europe also wants our travel dollars, by taxing airlines’ carbon emissions on trans-Atlantic flights?

The European Union wants to tax all flights into Europe, beginning on Jan. 1, on the basis of the miles they fly. The EU argues that because no global agreement on emissions reduction from aircraft is in place, it has the right to take the first step.

Carbon taxes would be levied on a per-mile basis, which means travelers from San Francisco to London will pay a higher tax than travelers from Washington to London.

Europeans are not calling this a tax, but an “emissions trading scheme.” Whatever the term, the International Air Transport Association has estimated that the tax would add $21 to $45 to flights to Europe.

Revenues would not have to go to the EU to improve the climate, but to individual European countries, which could use them at their discretion.

And the EU would have authority to exempt countries that take “equivalent measures,” as yet undefined, to reduce greenhouse taxes, leaving open opportunities to play favorites with friends (not America, nor Israel).

It’s a clever ploy — get foreigners to pay to bail out Europe’s crumbling economy.

The Air Transport Association, which has filed a suit to block the tax, has calculated that 8.7 percent of emissions in a flight from San Francisco to London are released over Europe. The remainder are released either in the United States, Canada or over international waters.

This grab at sovereignty has done something that even the threat of debt default could not do. It has brought Republicans and Democrats together.

House Transportation and Infrastructure Committee Chairman John Mica, R-Fla., has proposed the European Union Emissions Trading Scheme Prohibition Act of 2011, co-sponsored with Rep. Nick Rahall, D-W.Va., the ranking minority member of the committee.

The bill would prohibit American airlines, or any operators of American civil aircraft, from paying aircraft emissions taxes to Europe.

The Obama administration agrees. In hearings before the Transportation Committee on July 27, Deputy Assistant Secretary for Transportation Affairs at the State Department Krishna Urs testified that even though the administration supported reducing greenhouse gas emissions, it objected to this tax.

The new tax has even resulted in common ground between America, China and India. Asian countries also object to paying taxes on emissions generated in their countries, or in international waters.

The European High Court is considering a suit by the Air Transport Association and American airlines, originally filed in the High Court in London. The advocate general of the European High Court will issue an opinion Oct. 6.

If upheld in the courts, Americans would find it more expensive to travel to Europe, discouraging tourism.

Or, Asian airlines might route their European flights to stop just outside Europe — in Cairo, for example — and then continue to their final destination, reducing the tax. This would generate more emissions, because takeoff and landing consume more fuel.

The problem is solving itself. U.S. aviation emissions have declined by 15 percent over the past 10 years through improved technology.

New aircraft are cleaner than old ones. So, every time an old plane is removed from service, emissions decline.

The new Airbus A320 and the Boeing 787 Dreamliner use 20 percent less fuel than similar-size aircraft.
This tax needs to be stopped. If the EU can tax emissions of American airlines generated outside Europe, then why can’t it tax General Motors, which sells cars in Europe, for emissions by its factories in America or Asia?

Examiner columnist Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.

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