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European airline tax headed for turbulent skies

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Like Australia’s controversial proposal for a carbon tax, the airline trading scheme put forward by the European Union (EU) is facing some big obstacles.

For a start, the airline tax, which the EU rather optimistically suggests may operate from early 2012, has been vigorously opposed by airlines from China, the United States, Japan, South Africa, Singapore and even some  European Union countries.

The Americans and the Chinese may well challenge whether the tax is legal; a step that would have financial and timetable implications.

To further confuse the issue, other airlines may moves their bases in a bid to find loopholes in the tax.  This is because of debate and apparent confusion over whether the EU tax would apply for the whole flight to and from Europe, or just the part of the flight that is actually  in European skies.

Additional confusion seems to centre on what the EU intends to do with money raised from the tax.  Would this be directed to helping improve the airline industry – a move that would probably  be supported by all  — or just go into the coffers of EU member states. We’ve all heard about European economic management in countries like Iceland, Ireland and Greece.

Then there is the question of what the EU could do (if anything)  should the tax be simply ignored.  Any further heavy handed approach – like the media articles in non carbon price countries over recent days – might just invite retaliation.

And, like all these so-called Green programs, there is always the contentious issue of exemptions.  Who gets what …. and why?  And what about me?

Europe does not have a great track record in preventing fraud and profiteering in carbon emissions trading anyway  The whole airline carbon tax proposal begs the question of whether it will be yet another naive and massive handout to rip-off merchants.

Rather than the plain sailing suggested by some media outlets, the EU’s airline tax has a lot of turbulence to overcome before we see whether it has wings, whether it stalls on the ground, and whether it actually achieves anything.

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Written by ianandsue

May 16, 2011 at 2:32 am

Posted in Uncategorized

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