Friday, March 5, 2010

An EU direct tax, on petrol?

Firstly I should preface this article with a quick admission. I am not a raving Tory eurosceptic, there I said it, you can all hate me now. I support the idea of a European Union, specifically the ideas of free trade, and free movement of workers across borders. What I don’t support is the encroachment of it on sovereignty, the creation of a giant super state, oh and green taxes that are designed to raise revenue.

The telegraph is reporting that the EU, currently short of cash and unable to find member states willing to provide more, is planning to introduce a  EU wide “green levy” on all usage of fuels, that is usage of petrol, coal and natural gas. The funds raised by this levy will go straight to EU coffers not to member state governments.

Why? Well it turns out that all of those new institutions introduced by the Lisbon Treaty, the High Commissioner for Europe, the EU President etc cost a lot of money to run and no one thought about where that money might come from before everyone signed on the dotted line. Recently HervĂ© Jouanjean, Director General of the European Commission's Budget department, said that the EU was “very close to paralysis” because stretched national treasuries were unwilling to provide more funding.

In 2005, the EU proposed a direct rate of taxation of £9 per tonne of CO2 produced, which was shelved at the time as politically unpalatable. Too right, it would have, and still would, cost British Business and consumers £3.2 billion a year. This at a time when FTSE 100 companies are saying that they are paying 57% of their gross profits in taxation already, and the British consumer has seen tax on petrol rise by  nearly 11.5% since November last year (just over 3 months ago). In comparison the Austrian consumer has seen tax on petrol rise by only 2.25% in the same time.

No sane British government would ever allow the EU to collect direct taxation from it’s citizens. Except that we signed the Lisbon treaty, which has meant we’ve lost all kinds of vetoes and given the EU all kinds of powers that the public don’t really understand and I sometimes wonder if even the government does.

Ahhh but it’s for climate change will say the EU president, Gordon Brown the French and the Swedes. No it’s not, we should reply in unison. If the revenue being raised is going towards anything other than dealing with the effects of climate change then a so called “green tax” is nothing of the sort, it’s just a way of raising revenue. Why? Well think what will happen if it successfully changes behaviour. If this tax on the CO2 emissions of fuels makes people use less fuels then it will raise less revenues, and Baroness Ashton and Herman Van Rompuy won’t have any money to pay for their buildings, staff, expenses and everything else.

So in summary, a direct EU tax on fuels is a crazy idea because:
  1. The EU should have worked out how it was going to fund it’s new shiny things before it proposed them;
  2. The British tax payer, is already over taxed;
  3. Green taxes shouldn’t be used to raise revenue;
Oh and 4) A flat rate levy isn’t progressive!

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  1. Is this a "cast iron" plan?

  2. The Lisbon Treaty - and the all but identical Constitution before it - are simply too long for any sane person to read let alone understand. When you consider that the Labour government doesn't even seem to understand that increasing NIC "jobs tax" will make employing people more expensive and therefore reduce employment, what hope is there for them understanding a lengthy legal document such as Lisbon? Unfortunately the old but sound advice of always reading the small print and never signing something you don't fully understand has been ignored it seems.

    The problem with the European Union is that many member states - and the EU's functionaries - want exactly that, a full Union of Europe. As a country if we are to avoid being absorbed into this then we must propose an alternative European organisation - one that is based purely on trade, free movement, etc, and in no way political - that could run alongside the EU (indeed the EU would be a member). That way those nations wanting to integrate could do so, and others not.