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Travelers, Tourism Businesses to Face "Unhappy Landings" if UN-Backed Airline Tax Succeeds, Study Concludes
For Immediate Release June 13, 2006
(Alexandria, VA) -- A new United Nations-supported aviation tax scheduled to take effect in France just weeks from now should worry American consumers and taxpayers as much as those boarding French aircraft. That's the conclusion of the latest study from the non-partisan National Taxpayers Union Foundation (NTUF), which has tracked a persistent trend among supranational bodies to impose policies on American taxpayers from above -- the latest being a wealth-transfer plan funded by air travelers.
"The taxation scheme is clearly another effort on behalf of Western Europe to build a global welfare-state and pass the burden of a guilty conscience onto taxpayers around the world," said Katelyn Finley, who served as an NTUF Associate Policy Analyst. Finley, who authored the study, traced the impetus behind the proposal to the United Nations' Millennium Development Goals, a set of eight objectives to halve world poverty by 2015. To raise the billions in funds to begin this undertaking, UN leaders as well as European officials are advocating an international airline tax.
However, Finley's in-depth analysis noted that the implementation of additional taxes on airline tickets could significantly decrease travel demand and place an added burden on an often-beleaguered industry. In the United States, for example, passengers on round-trip international flights pay nearly $50 in various fees and charges plus a 7.5 percent excise on the ticket price (passenger facility charges and flight segment taxes only add to the load).
Citizens of other nations aren't likely to fare well either. The French government will be the first to implement the "development tax" on air travel next month, at a charge of up to $47.66 per ticket (rates are based on distance and class of service). Yet, between 1998 and 2003, aviation tax revenues in France had already increased 14 percent, while user charge collections jumped almost twice as high (27 percent).
The report also found that subsidies from wealthy countries would do little to improve the economic health of struggling countries. "[T]he World Bank's Development Reports have consistently shown that free markets, not constant supplies of aid, are the fastest and most reliable means of placing developing nations on the track toward economic growth," Finley added. "To give one example, improving developing nations' open access to agricultural imports may prove more beneficial over time than simply providing them with food shipments."
So far the U.S. has resisted these types of global taxes, a stance Finley hopes will continue. "Ameliorating third-world poverty is clearly more complex than anything an airline tax can accomplish," she concluded. "While additional food and vaccines could deliver a small dose of relief to impoverished individuals, material contributions will only perpetuate developing nations' dependency on foreign aid."
NTUF is the research and educational arm of the 350,000-member National Taxpayers Union. Note: NTUF Issue Brief 155, Unhappy Landings: The Latest UN-Backed Push for Global Taxes, is available online at www.ntu.org.