China and India Airline Tax Revolt May Overthrow EU International Taxing Authority

Airlines in China and India refuse to pay the EU carbon tax, perhaps leading to restoration of sovereign independence, worldwide.

WASHINGTON, MAY 15, 2012 – According to a Reuters story, EU Climate Commissioner Connie Hedegaard has set a mid-June deadline for India and China to explain why two unidentified Indian and eight Chinese airlines are not satisfying the EU’s latest money grab by buying the EU’s carbon offsets. (Keep in mind, buying these offsets does nothing to directly reduce pollution, but it does enrich the EU.)

This is really wadding up the EU’s plan, since some 1200 airlines have already rolled over and charged their customers more money, acting as little tax collectors for the Europeans.

Barbara Lewis, bylined from Brussels, says the EU Climate Commission may be open to some other workable solution – but it’s difficult to know what would be “workable,” when the actual problem is so elusive and the proposed solution – raising taxes – does not help the climate; it just goads people into traveling by less-efficient means, often in more cars, which use more resources and create more waste, more accidents, uses more land, etc.

There is an opportunity here, for airlines that service Europe. It will be more difficult for the “captive” (Europe-based) airlines, but solidarity across the industry could overcome even this.

Freedom from oppressive and capricious taxation could begin. The airline oligopoly (an oligopoly is defined as a relatively small number of pivotal players which dominate an industry) could flex its muscles, and simply decide to refuse to pay the tax. There’s principle here: as the Reuters writer quoted Indian Civil Aviation Minister Ajit Singh, “You cannot enforce laws outside your sovereign area. Its implications are huge. Now you are talking about aviation; tomorrow you will talk about shipping…”

Of course expansionist government strategy is always to attack a manageable minority first and establish a precedent; then other industries will be forced to fall in line. Airlines have no friends in other industries, so they’re easy targets. (Remember, “First they came for the Jews, and I did nothing, because I am not a Jew…?) But – and here’s the big difference – airlines have popular support whether it’s manifest or not, because they are supplying a necessary service that government has not yet taken over. Because they are thus relatively independent, they can act independently, if they act together.

And there is hope. It’s reported that some twenty nations, opposed to the extra-territorial tax scheme the EU is forcing on the industry, met in February in Moscow, and will soon meet again in Saudi Arabia. (We should note here that the EU Court of Justice has indeed ruled that this tax is not a tax, but a “market-based mechanism.” Surprise, there!)

I hereby volunteer to help the protesters, in hope that this will be the first step toward throwing off the smothering blanket of governmental over-taxation that is the lifeblood of all governments that have overgrown their usefulness.

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Tim Kern

Tim Kern taught economics for fifteen years, and discovered that understanding life is easy; it’s recognizing reality that takes practice. He holds a music degree, and later earned an MBA in finance from Northwestern University. He has lived across the US, and now makes his home in Anderson, Indiana.

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