We’ve been spending too much time on elections, so let’s get back to pointing out inane, foolish, and destructive government policies. Our latest example comes from the United Kingdom, where politicians are pushing airline ticket taxes to punitive levels and harming the tourism industry. But the real lesson from this story is that it is very dangerous to give politicians a new revenue source.
The airline ticket tax was first imposed by a supposedly Conservative Party government in 1994 at a maximum rate of 10 pounds. During the Blair/Brown Labor Party reign, the tax was boosted to a maximum rate of 50 pounds. Now, the new government, led by ostensible Conservative David Cameron, is pushing the maximum tax up to 75 pounds (more than $120) per ticket. Here’s an excerpt from the story in the Telegraph.
Families are avoiding holidays Egypt and Caribbean because of the high cost of air taxes – even before the hike in passenger duty that comes into place on Monday. …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. It is the second significant rise in two years, and figures show that previous hikes have already influenced people’s choice of holiday destinations. …Bob Atkinson, travel expert at Travelsupermarket.com, said: “Families looking to book for this winter and summer next year will be faced with tax rises of up to 54 per cent on their family holidays. This tax rise is completely out of line with inflation and bears no relation to the original purpose of the tax. …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 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”.
No wonder families are choosing not to travel. But, more important, imagine what American politicians will do if they ever succeed in imposing a value-added tax. The rate initially will be low (just as the original income tax had a top rate of just 7 percent), but nobody should delude themselves into thinking the rate won’t quickly climb as greedy politicians get hooked on a new form of revenue cocaine to feed their spending addictions.
[…] new taxes that are capable of generating a lot of revenue (or a medium amount or small amount of […]
[…] here’s a chart from the study that tells you everything you need to know about how politicians behave once they have a new source of tax […]
[…] here’s a chart from the study that tells you everything you need to know about how politicians behave once they have a new source of tax […]
Surprising this has not been mentioned, so I will. Grant any government an increase in revenue, and their immediate response will be to spend themselves further into deficit. The only way to positively affect deficits is to REDUCE funding to government. I’m sure Dan can quickly gin up a chart demonstrating this.
[…] here’s a chart from the study that tells you everything you need to know about how politicians behave once they have a new source of tax […]
[…] the way, the story also reminds us about how dangerous it is to give a government a new source of […]
[…] especially important not to let politicians get new sources of revenue. That’s why, for instance, the value-added […]
[…] And now the leader of the Lib Dems, Nick Clegg, is proposing a wealth tax. He says it will be a temporary measure until the fiscal emergency ends, but I would be shocked if politicians changed its mind after getting their hands on a new source of revenue (just look, for instance, how British politicians went crazy after first imposing an airline ticket tax). […]
[…] And now the leader of the Lib Dems, Nick Clegg, is proposing a wealth tax. He says it will be a temporary measure until the fiscal emergency ends, but I would be shocked if politicians changed its mind after getting their hands on a new source of revenue (just look, for instance, how British politicians went crazy after first imposing an airline ticket tax). […]
Tax what you would have less of. The French intiated a tax on the wealthy. The productive wealthy are leaving France in droves. The folks that are left are quite a bit more equal, and less employed.
[…] Read this if you want to see what happens when politicians get a new source of revenue. Rate this:Share […]
[…] And now the leader of the Lib Dems, Nick Clegg, is proposing a wealth tax. He says it will be a temporary measure until the fiscal emergency ends, but I would be shocked if politicians changed its mind after getting their hands on a new source of revenue (just look, for instance, how British politicians went crazy after first imposing an airline ticket tax). […]
[…] income tax in 1913 morphed into the nightmare we face today, but I also call your attention to the British tax on air travel, which has ballooned since its introduction in […]
[…] trust politicians with new sources of revenue. Whether we give them big new sources of revenue or small new sources of revenue, they will always figure out ways of pushing up the tax rates so they can waste more money trying […]
[…] trust politicians with new sources of revenue. Whether we give them big new sources of revenue or small new sources of revenue, they will always figure out ways of pushing up the tax rates so they can waste more money trying […]
I think the point of the tax is to convince people not to fly. The greenies want to destroy the airline industry, as it generates tons of emissions every year.
If they have their way, the only people who’ll be flying will be Greenpeace board members on their way to enviro retreats.