"Revenue Cocaine"
That's what Cato's Dan Mitchell calls new sources of revenue for politicians. Like the wild amounts of airline taxes passengers in the UK are made to pay. Not surprisingly, they're stopping people from flying. From a Telegraph/UK story by Myra Butterworth:
The duty, which is paid by all travellers on leaving Britain and added automatically to the price when a ticket is booked, is to increase by 50 per cent to some destinations....The tax was introduced in 1994 at the rate of £10 on long-haul flights, but increased by the previous Government, which said it was a necessary "green measure".
The duty is split into four bands, with Egypt and the Caribbean being particularly badly hit.The increases mean a family of four flying to the Caribbean will pay £300 in duty compared with the old rate of £200 or £160 last year.
Willie Walsh, the chief executive of British Airways, has branded the higher taxes a "disaster". Earlier this month, he called the duty a "disgrace".
£300 is $487.32. Imagine having an extra $500 tacked onto your family's flight cost and sucked right up by the government.
It's what we're in for if we ever get a VAT, warns Mitchell. Expect politicians to start it out at a "reasonable" 7 percent or so. Start it out. The temptation of snorting revenue cocaine is just too hard to resist after that, and up, up and away! (For the taxes that is, not the airline passengers, who will be staying home in droves.)
Here's what it's doing to Caribbean tourism.
Another story in the Telegraph advises passengers that they can avoid the huge taxes by flying to Europe before catching long-haul flights. When your government makes you take an extra plane just to avoid being taxed blind, something is very, very wrong.







OK, but why do they have to do the "family of four" thing? Can't they just say £75 per person?
And you can't necessarily extrapolate an airfare tax onto a general VAT. One of the reasons they feel ok raising specialized taxes is because it could be seen as a "luxury" tax, not affecting everyone. A VAT would affect everyone, and be less politically viable to raise.
Not that I'm in favor of a VAT, but that's a different argument.
clinky at November 6, 2010 8:02 AM
Certainly there is a problem with government constantly sucking up money.
This one doesn't seem so bad when you look at the cost of the airfare. I checked online and found the lowest I came up with is $4500 so that is like a 10% tax. Most airfares were more like $9500 - less than 5% and rates where quickly going up.
I heard in Washington State they voted out taxes and put in a big barrier to increases in tax rates.
The Former Banker at November 6, 2010 2:40 PM
Bloated budgets and taxes on everything can be seen as a type of theft. Politicians spend "inefficiently", giving outsized benefits to the powerful and connected, and they keep profits on side deals. Borrowing (running deficits) supplies more money to the theft.
Why would they want to stop doing this? Absent voter anger and action, they will spend (steal) the last dime they can tax or borrow. Why not?
→ The Political Manual: Adequate Compensation
Andrew_M_Garland at November 6, 2010 4:38 PM
I think the public in general needs to be given more opportunity to find out what our govt is spending money on and more voice in saying "stop!"
For one thing, if we're giving money to other contries to help keep people from starving, ok, but if we're giving money to countries who hate us so that the people in charge can buy nicer jets and keep hating us, forget it.
KrisL at November 6, 2010 5:05 PM
Doesn't anyone remember TARP. The thing that still sticks in my craw is SEC. 503. EXEMPTION FROM EXCISE TAX FOR CERTAIN WOODEN ARROWS DESIGNED FOR USE BY CHILDREN
This just corrected for the excise tax and duty taxes on arrows that are either manufactured domestically or overseas. (link below.) I have no problem with the correction -- but why was it needed in the first place?
Now my question -- why is there a special tax on arrows (and bows) in the first f'ing place? If I go hunt a turkey, deer, boar, or other wild game I am already spending money on the hunting license, clothing to hunt in, the cost of the bow (which can be $$$$)and the rest of the associated gear. So I, and my neighbors, take wild game to subsidize our larders. Does that mean I need a special tax above the normal sales tax?
The day you can explain it to me -- I'll buy you a bottle of your favorite drink.
If you think a VAT is the answer -- you are deluded. And that would be on top of the income tax that you are already paying. You think the fed would give up income tax and switch to a VAT only -- You have no grasp of reality.
Until we get back to a fed that is small, limited, and constitutional we are so hosed.
books.google.com/books?id=MuBNGjy5o6AC&pg=PA22826&lpg=PA22826&dq=excise+tax+hunting+arrows&source=bl&ots=TzLmPmvZrx&sig=Y6W9Gr9W3Geas7YIQCgfoClqLgE&hl=en&ei=kgnWTJS4ENGgngfW6_m6CQ&sa=X&oi=book_result&ct=result&resnum=3&ved=0CCAQ6AEwAg#v=onepage&q=excise%20tax%20hunting%20arrows&f=false
Jim P. at November 6, 2010 7:31 PM
I think the worst part of taxes at times is how they sell it to the people.
Look we have this problem (Global Warming, Debt) and we need some money to solve it. Hmm okay go some of the people so they agree. Tax comes in. People go how is the problem, solved yet, getting solved. Nope goes the politician. What about the money you took from us. Oh that we decided to spend it on something else. Thanks for the money! But dang we still have the problem goes the politician. We need some more money to solve it. So we are either going to raise the tax or make a new one. Lather. Rinse. Repeat.
John Paulson at November 6, 2010 7:34 PM
For one thing, if we're giving money to other contries to help keep people from starving, ok,
NO, NO, NO, NOT OK
http://en.wikipedia.org/wiki/File:Haiti_(orthographic_projection).svg
Actually click on the link and look at the damn picture.
The earthquake affected the WHOLE island, so why does only Haiti need so much help?
The idiots slashed an burned their forests, leading to an endless cycle of mudslides, earthquakes happen all the time(document all the way back to the spanish invasion and conquest of the island) yet their government refused to ever institue rational building codes in preperation,
Its been know for decades that they would never be able to respond to a major, or even a moderate, natural disaster.
Billions of dollars in aid for 10 million people (only 1 million of which lost their homes offically). ANd still nothing gets done, and when they commit crimes against each other its the UN's, and the US's fault for not providing enough protection.
At what point do we have to stop taking care of people in other countires to stupid and apathetic to look after themselves?
I'm already sick of footing the bill for the stupid and apathetic in this country
lujlp at November 6, 2010 7:45 PM
I'm at the point that foreign aid is worth ignoring for right now.
Cut the budget by 20% across the board. If you don't have the people capable of doing the job -- get rid of them.
Jim P. at November 7, 2010 10:50 AM
Hey, start locally. Chances are, you have a Special Purpose Local Option Sales Tax referendum coming around every election cycle.
It's time for you to ask why that is necessary. Properly set up, a tax is a percentage of the traffic in a venue to pay for the administration of THAT venue.
That means that you have somehow been de-pantsed by poor spending practices anytime a SPLOST is proposed.
Radwaste at November 7, 2010 5:11 PM
I just got back from several days in LA.
The tax rate on the rental car?
40%
Hey Skipper at November 8, 2010 10:42 PM
Leave a comment