France Pushes Global Air Passenger Tax to Aid Poor Nations

Daily News Article   —   Posted on September 13, 2005

(by Eva Cahen, Sept. 13, 2005, Paris – French President Jacques Chirac hopes to find support at the United Nations summit in New York this week for a controversial plan to fund aid to developing countries through a tax on airline travel.

So far, however, France has failed to obtain solid European Union backing for the idea.

Under Chirac’s proposal, different tax rates would be applied to various destinations and airline seats, but all airlines leaving a country’s airports, regardless of nationality, would have to impose the levy.

The goal, he says, is to help meet the U.N. Millennium Development Goals to halve world poverty levels by 2015.

Chirac told a meeting of French ambassadors last month that he had asked his government “to take the necessary steps to implement such a tax starting next year.”

Britain, which holds the rotating presidency of the E.U., is supportive of the plan.

At an E.U. finance ministers’ meeting in Manchester, England last week, French Finance Minister Thierry Breton and British Chancellor Gordon Brown said the new tax would be used to fund health projects, specifically those dealing with HIV/AIDS, tuberculosis and malaria.

Britain, which already imposes a passenger duty on air travel, said it would not levy a new tax but divert some of the existing funds for the projects.

The French and British finance ministers said that the proposal had the support of Algeria, Brazil, Chile, Germany and Spain, but reports from the ministers’ meeting said neither Germany nor Spain was willing to support it in its current, compulsory, form.

Many other countries in Europe, particularly those with strong tourist industries such as Greece, are opposed to the air travel tax. The Austrian government announced it would also not take part.

In the U.S., the Freedom Alliance views Chirac’s plan as a step towards a “global tax” long campaigned for by internationalists.

“Here in the United States, our Constitution says only the American government can impose taxes on the American people,” said the group’s president, Tom Kilgannon, in an earlier statement. “They cannot be imposed by the United Nations or Jacques Chirac.”

Chirac originally proposed the levy on airline travel at the World Economic Forum in Davos last January.

Earlier this month, the European Union published a study on the proposal.

It found that depending on the tax rate and how it would be imposed, the E.U. would be able to contribute up to 2.76 billion euros ($3.39 billion) each year. France, Germany, Italy, Spain and Britain would be the largest contributors, providing about three fourths of the total amount.

But the study also found that the tax could reduce air travel by 3-4 percent and hurt the airline and tourism industry.

The French National Union of Travel Agencies (SNAV) opposes the plan.

A spokesman said the body was not against the idea of providing aid to developing countries – the travel industry already did this by helping to develop tourism.

“Today, when you buy a plane ticket, there are already taxes and taxes. Between the airport taxes, the security tax and the fuel tax, and tomorrow this new tax, the customer won’t know anymore what he’s buying,” said secretary general Rachid Temal.

This was not the best time to add a new tax to an industry that over the past four years has been hurt by terrorism, disease epidemics, higher energy costs and natural disasters, Temal added.

The Millennium Development Goals, set in 2000, are ambitious plans which include cutting poverty in half, halting the spread of AIDS, and provide universal primary education by 2015.

Chirac, who was hospitalized last week after a “minor vascular accident,” will not be attending the U.N. world leaders’ summit but will be represented by his prime minister, Dominique de Villepin.

Although Chirac gathered some international support for his outspoken opposition to the U.S. war in Iraq, he has suffered a series of defeats at home in France, capped by the rejection in a referendum of the proposed European constitution, a vote largely seen as a popular disavowal of his economic policies.

Some French analysts see the proposition to levy an air tax as a bid by the French president to take back the international spotlight by acting as a champion of the world’s poor.

The Freedom Alliance believes that another of Chirac’s goals is to promote world government.

“He and many others have long tried to get around or to supplement the voluntary dues mechanism for funding the United Nations and one way to do that is these taxes,” said Kilgannon.

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