The European Union (EU) is currently working on a plan to impose an EU-wide minimum tax rate on fuels necessary for aviation in the pursuit of combating climate change. However, the proposed tax policy has special carve-outs for luxury private jets.
The Irish Times reported that executive jets would escape plans to tax polluting aviation fuels according to the draft proposal that was presented by the European Commission.
Reportedly, the European Commission plans to strictly enforce a new minimum tax rate on “aviation fuels, as it seeks to meet more ambitious targets to fight climate change.” Historically, aviation fuels have largely avoided EU fuel taxes.
The proposed tax policy states that the practice of not taxing aviation fuels equivalently to fuels needed for ground and sea transportation “is not coherent with the present climate challenges and policies.” The proposal added that the EU tax rules currently promote the use and consumption of fossil fuels over green energy sources and that they ought to be rewritten to support the EU’s aggressive approach to transitioning Western nations to carbon neutrality.
From 2023 onward, the minimum tax rate for aviation fuel in the EU would start at zero and gradually increase over a 10-year period until the total rate is imposed. The draft tax proposal did not specify what the final rate would be.
Interestingly, however, the minimum EU tax rate would not apply to cargo-only, which are often required for the import and export of goods, or to “pleasure flights” and “business aviation,” which are terms largely used when referring to executive and private jets.
Business aviation in Europe had already climbed above the levels reached in 2019, just before intense travel restrictions were implemented across Europe in response to the COVID-19 pandemic.
During the first six months of 2021, global business aviation activity fell only 4% short of the first half of 2019 and registered a 42% increase from the first half of 2020.
Travel by executive jet accounts for just under 19% of all aviation, while air traffic from cargo planes accounts for less than 5%.
Implementing additional taxes on fossil fuels poses significant political problems as EU member states are experiencing difficulty attempting to implement a trade embargo on Russian-produced oil products.
RedState, a conservative political blog, noted that the EU’s mad-dash to implement a green energy agenda likely wouldn’t have a considerable impact on reducing the global carbon output so long as countries like China and India continue to implement aggressive industrialization policies.
Democrats in Illinois are very proud of their decision to delay an increase of the state's gas tax, which at 40 cents per gallon is already among the highest in the nation. They are so proud of this action, in fact, that the recently passed bill freezing the fuel tax requires gas stations to advertise what the legislature has done.
On Saturday, the state legislature passed a new state budget that includes a temporary freeze of the state gas tax, which was requested by Democratic Gov. J.B. Pritzker. Illinois drivers already pay more than 40 cents per gallon in taxes, according to federal data. The governor claimed that by preventing the tax from rising with inflation, he would save Illinoisans a combined $135 million.
Critics blasted the plan as an election-year stunt that would only save drivers an estimated 2.2 cents per gallon, noting that in 2019 Pritzker doubled the gas tax and that inflation has caused prices at the pump to surge more than $1 per gallon over the last year.
Even so, the legislature passed the gas tax freeze, and they want everyone to know it. The legislation requires that retailers post advertisements that read, “As of July 1, 2022, the State of Illinois has suspended the inflation adjustment to the motor fuel tax through December 31, 2022. The price on this pump should reflect the suspension of the tax increase.”
The new state budget also includes a temporary suspension of the 1% tax on groceries for the year, a fact which supermarkets must advertise as well.
“From July 1, 2022 through July 1, 2023, the State of Illinois sales tax on groceries is 0%,” the bill requires grocery stores to post.
The notices are required to be printed "in bold print on a sign that is no smaller than 4 inches by 8 inches." The sign must also be "clearly visible to customers."
There are penalties for failing to comply with these mandates. If signs are not posted within 14 days of the bill becoming law, retailers may be fined up to $500 for each day they do not comply.
Josh Sharp, CEO of the Illinois Fuel and Retail Association, blasted the legislature when these requirements were added as an amendment to the budget bill and threatened a lawsuit.
“This industry won’t be forced into offering free election year advertising for the Governor. Ordering businesses to take part in speech that is compelled by the government under the threat of fines and criminal penalties is unwise and unconstitutional,” Sharp said.
Republican state Rep. Mark Batinick mocked Democrats in an interview with the Federalist, noting that neighboring states have suspended their gas taxes entirely to provide drivers with relief from inflation.
“It’s like 50-60 cents cheaper in the states around us and they want to advertise that it could have been 52.2 cents,” Batinick said. “I’m amazed that they want to pat themselves on the back for a 2.2 cents stoppage of a tax increase.”
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