The EU is moving to set a tax on carbon emissions. According to USA Today , “The European Union's Emissions Trading Scheme sets a cap on carbon emissions and then charges airlines for flights to or from the continent. The industry group Airlines for America estimates the program could cost U.S. carriers $3 billion over the next decade. U.S. airlines have opposed the system as an unfair tax on flights outside Europe, and China and India have refused to participate in the program.” The idea of the EU imposing taxes on American travelers also has at least one member of Congress concerned. Senator John Thune (R-S.D.) introduced a bill in 2011 to “to prevent the European Union (E.U.) from adding a tax on flights traveling through U.S. airspace.” Senator Thune's office calculated that this EU-imposed emissions tax will cost U.S. air travelers and carriers a whopping $3.1 billion dollars between 2012 and 2020.
Not only will this emissions tax harm the economy, it is a blatant violation of international law. While an outside cash stream is an easy way to raise funds, the EU cannot ignore the reality it is in direct violation of the law. How would the EU respond if the tables were turned and the U.S. sought to enact a tax on citizens of the EU? Perhaps the EU could spend its time more wisely by examining ways to reduce spending and tighten its pocketbooks. And if it still desires more money to quench its propensity to spend, then nothing is stopping the EU countries from raising taxes on its own citizens.
The emissions tax is just one of a number of taxes that are being looked at by international bodies. Another tax that is being considered is the Solidarity Tobacco Contribution (STC), through the United Nations. The STC is an effort to raise more money for international causes. The World Health Organization (WHO), an agency of the UN, is proposing a $.05, $.03, or $.01 cent tax on tobacco products, depending on the wealth of the country where the products are being sold. This is being done with no regard to the potential economic impacts of such a policy. According to the WHO , “Do not allow concerns about employment impact to prevent tobacco tax increases,” and “Do not allow concerns about the inflationary impact of higher tobacco taxes to deter tax increases.” This reeks more of social engineering and tax harmonization rather than a genuine concern for healthcare. The scariest part is that this process started in 2011 and the WHO is hoping to start collecting the first of these taxes by the end of 2012. This is breakneck speed for any government bureaucracy.
The United Nations has not had success in the past with this type of “Robbing Peter to Pay Paul” kind of scheme. Creating revenue for social services by implementing a new tax simply hasn’t’ worked in the past. Funded by a tax on French airlines, UNITAID was created in 2006 to contribute to scaling up access to treatment for HIV/AIDS, malaria and tuberculosis. Unfortunately, UNITAID has high overhead and its executive director (a former French official who was the one who introduced the tax when he was in office) collects a big salary.
UNITAID has been accused of lacking transparency, holding major conferences for unknown costs and failing to react to the risks of corruption and theft. Above all, given its status as an international organisation, the WHO refused to communicate its audit reports concerning UNITAID to the Cour des comptes [a French quasi-judicial body conducting financial and legislative audits of public institutions], leading the magistrates to issue a reservation.
These attempts at establishing international tax regimes need to be stopped. American taxpayers and consumers should not be subjected to taxes instituted by international organizations that don’t necessarily share the interests of the United States.
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