Each morning, Axel de Tarlé decrypts one of the most important economic news of the day.
Axel de Tarlé, Brussels is planning to tax kerosene and the price of air tickets could take off.
Yes, first surprise, we learn that contrary to what we had been told, the famous Chicago Convention of 1944, does not prevent absolutely to tax the kerosene. So, Brussels is working on a kerosene tax, valid inside Europe. A tax of 33 cents per liter, for comparison, for gasoline, taxes represent 90 cents. Remember, that was one of the claims of "yellow vests". Why overtax gasoline while kerosene does not support any tax, not even VAT.
The sky is a tax haven for C02
The sky is a tax haven for CO2, while there is a real subject on pollution. Ryanair is now among the top 10 European polluters, alongside nine coal plants. This kerosene tax would increase the price of the air ticket by 10%. But if the price goes up, the demand goes down. Thus, with this kerosene tax, the European Commission expects a drop in air traffic of 11%. If French people give up flying, it's less pollution.
Yes, but it's still a tax! The movement of "yellow vests" has (also) shown a shame of the French vis-à-vis all taxes!
It is true, if this measure is to raise prices so that the most modest households can no longer fly, it is not socially very acceptable. Except if - this is precisely what this movement of "yellow vests" has shown - we use the proceeds of this tax (3.5 billion euros per year in France) to reorient passengers to modes of transport less pollutant. And in France, we have an alternative: the TGV. It is 40 times less polluting than the plane. But sometimes more expensive!
This is absurd, but a Paris-Marseille train ticket can cost more than the plane. So, let us use the product of this kerosene tax to reduce the price of the TGV, and thus encourage us to prefer the train rather than the plane. This is the famous incentive ecology, not punitive!