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| Home Front: Politix |
| Taxing Off A Runway |
| 2009-09-11 |
| Air travel is valuable but vulnerable, subject not only to mishaps but also to greedy tax bites that discourage consumers. Behold, then, two boneheaded schemes from both sides of the Atlantic. Hard to say which is worse. From the U.S., the Democrat-led Congress is mulling the misnamed "Travel Promotion Act" to hit travelers with a $10 tax for visiting the U.S. under the visa waiver program. High-spending Europeans will take the hit. The aim? To promote more tourism through a "nonprofit" company staffed by political cronies and set up to buy advertising. From the U.K., a government advisory Committee on Climate Change is recommending a $10 tax of its own on every airline ticket sold. The purpose here is to compensate Third World countries for global warming, turning every business trip into a guilt trip. For anti-Western tinhorns already short of cash -- like Zimbabwe's Robert Mugabe or Ecuador's Rafael Correa -- the gravy train is rolling in. Both the tax on tourists and the tax for dictators are likely to see retaliatory levies from the other side of the pond. For consumers, that means an extra $20 in fees for air travel just to start, which will pile high for families taking vacations or business travelers making multiple trips. Net result: less travel, a depressed airline industry that cannot grow and more job losses. There's reason to think the tax sponsors on each side of the pond intend as much. Sponsors of both the House and Senate versions of the U.S. bill are among Congress' leading protectionists. For example, Massachusetts Democrat Bill Delahunt, a sponsor of the House bill, has voted against free trade with Peru, Australia, Chile, Oman, Morocco, Singapore and Central America. At the same time, he has voted to subsidize U.S. industries and said yes to steel quotas. He has also opposed Mexican truck access, normal trade relations with China and presidential fast-track authority. Just about the only reason the Cato Institute didn't rate him an absolute zero on its free-trade matrix is Delahunt's soft spot for communist regimes, particularly Cuba. Delahunt reportedly has dismissed the controversy over the proposed travel tax as "a tempest in a teapot" and an ex-staffer is believed to be slated to head Uncle Sam's new travel promotion office. Over in the Senate, the effort is led by Byron Dorgan, D-S.D., who has also shown a hostility to the free flow of trade, capital and people. On the trade front, the last time Dorgan's name came up was when Mexico selected South Dakota products for retaliatory tariffs after he voted to keep Mexican trucks out of the U.S. in violation of its North American Free Trade Agreement treaty obligations. Nevada's two senators, Democrat Harry Reid and Republican (and bill co-sponsor) John Ensign also stand to benefit. Both think the tax to buy ads abroad to promote tourism here will be the jackpot for economically stressed Las Vegas. Meanwhile, over in Europe, the protectionist vibe under the cover of green political correctness is going strong. "We are calling for a cap that would not require people to fly less than today, but would constrain aviation emissions going forward," said U.K. official David Kennedy in an e-mail to Bloomberg News. They've set the arbitrary emissions cap for airlines at 2005 levels, meaning there won't be any more economic growth beyond levels seen four years ago. But dictators can cheer up, because the incoming cash means they won't have to do anything to generate growth. Elites will have no trouble continuing their travel. Just ask House Speaker Nancy Pelosi, for whom a tariff is nothing compared with the cost of the nine congressional jets she has on order. But for the rest of us, costs will rise and some families may not be able to travel at all. And let's not forget the airlines, which must fill flights, and aircraft manufacturers,which support communities with jobs. The taxes will not only hit Europe and the U.S. and benefit rivals in Asia that shun tariffs. They will also hurt less-wealthy countries that rely on tourists, such as Costa Rica or Thailand. These are among the very countries the European tax is supposed to help. Students, who may otherwise become area experts in places like the Middle East or Russia, will also travel less. The whole thing amounts to a redistributionist scheme that won't stop global warming and won't promote tourism. All it will do is control movement and expand government. |
| Posted by:Fred |