7 ms·

> Planes don't have to pay any fuel taxes in Germany and other things > For fuel and electric, trains still have to pay full taxes. So not suprising that plane

by rsj_hn 5y ago

> Planes don't have to pay any fuel taxes in Germany and other things > For fuel and electric, trains still have to pay full taxes. So not suprising that planes a cheaper with better tax conditions. Aviation is heavily taxed in Europe and Rail is heavily subsidized. One fact taken out of context shouldn't be used to paint a picture that is the opposite of this basic reality. The problem with taxing aviation fuel is that EU directives make it hard for a country to tax fuel on cross border flights[1] (you can tax domestic flights, but almost all flights in the EU are cross border). Therefore what European nations do instead is apply exit charges to flights as a special aviation tax. They still collect the money, but as a departure tax, not as a tax on aviation fuel. Those exit charges were just increased in 2019. It's just a lot easier to add a departure tax than go through all the bilateral tax-agreements with other EU nations to impose a tax on aviation fuel for all flights out of Germany, so this is really an issue of minimizing paperwork rather than not taxing aviation. And Aviation exit charges are higher in Germany than in any other EU nation - each passenger pays an average of 33 euros per flight leaving Germany[5], from 13 euros for short-haul to 60 euros for long-haul. (Britain has higher exit charges, and because it's not in the EU, it is able to tax aviation fuel pumped in its own borders). And of course there are already taxes on carbon in the EU, so not sure why there should be a special singling out of one particular use, just because it gets some people riled up. Those taxes have to be paid by aviation fuel producers, so they still go into the cost. Deutsche Ban, on the other hand, is heavily subsidized -- they are getting a special covid subsidy 6 Billion euros[3] atop regular subsidies over 11 billion[4] and an extra 50 billion euro subsidy for long term capex[2]. [1] https://www.transportenvironment.org/wp-content/uploads/2021/07/2019_02_CE_Delft_Taxing_Aviation_Fuels_EU.pdf https://www.transportenvironment.org/wp-content/uploads/2021... [2] https://www.dw.com/en/germany-to-inject-extra-50-billion-into-deutsche-bahn-rail-network-reports/a-48043781 https://www.dw.com/en/germany-to-inject-extra-50-billion-int... [3] https://www.reuters.com/article/us-deutsche-bahn-bailout/german-government-announces-6-billion-rescue-package-for-rail-operator-idUSKBN2322CH https://www.reuters.com/article/us-deutsche-bahn-bailout/ger... [4] https://economics21.org/html/europes-flawed-addiction-to-rail.html https://economics21.org/html/europes-flawed-addiction-to-rai... [5] https://www.fccaviation.com/regulation/germany/aviation-tax https://www.fccaviation.com/regulation/germany/aviation-tax

PaulDavisThe1st 5y ago
The subsidies reflect the belief/position/ideology that the train brings a net benefit to all of society, and so should be paid for by everyone, not just those who ride. This is intended to be in contrast to flying, which brings more costs than benefits. You can certainly argue that these beliefs are incorrect if you feel like it, and it's not as if there isn't a case to be made. But it's not just a simple matter of "we tax this, and subsidize that".
- rsj_hn 5y ago
  The parent post I was responding to was saying that the reason trains cost more is that that aviation was being subsidized at the expense of trains. That's just wildly incorrect. They supported that position by taking one out of context fact. I remedied that by providing the overall context. I was not making a judgement as to whether trains should be subsidized or not. That's a whole separate discussion. But since you bring it up, I'd say that in general, transportation of all kinds provides such massive positive externalities that it should probably be subsidized. Then we can debate how much more trains should be subsidized over airplanes, but both create massive net positive externalities, IMO.
  - PaulDavisThe1st 5y ago
    I think it's really hard to argue that for planes. In saying that I don't mean that I think it's clearly not true. I mean that the case for net positive externalities for air travel is dependent on things like (a) the geographic scope you consider (b) the temporal scope you include (c) value judgements about time-efficient travel and much more. One could legitimately take quite opposite positions on all these aspects (and more), and would end up reaching very different conclusions. Something like this applies to trains also, but much less so because their inherent geographic scope, environmental impact, sociological impact and effects on reducing travel time are much less than flying.
    - rsj_hn 5y ago
      So you are correct that externalities is something that is really ill-defined, which is why all claims to impose externality-based taxes should meet a high bar of rigor. In most cases, that's just impossible and the taxes end up being applied for political or emotional reasons rather than objectively taking all costs and benefits into account. But when it comes to a few areas, we know that there are massive positive externalities in anything involving transportation or communication. Anything that makes the world smaller generally has big positive effects. Even if you never buy a foreign good, the fact that a good was brought in will lower the price and raise the quality of the domestic good you do buy. That generates employment and income. Anything that lowers the price of bringing in that good will have a huge positive effect on the economy. With planes, the fact that they make transportation easy and affordable generates massive revenue for tourism, trade, employment. European Airports alone generate about 675 Billion in GDP -- 4% of the EU's GDP when both passenger and freight is taken into account[1]. And that's just airports. An older FAA study concludes that civil aviation generates 5.4% of US GDP[2] and that's a fairly conservative study not even trying to measure too many spillovers. Then there is a third effect, which is the superiority of point to point designs. Miami Beach was developed in the 30s and 40s because some developers saw its potential as a great beach destination. But it was only with plane flight that the rest of the nation had a chance to enjoy it. Or Las Vegas, another center that sprang out of nowhere. The fact that I can fly from pretty much anywhere in the country to Miami for $100 massively increases the tourism trade to Miami Beach. To do that with rail, you'd have to overcome n^2 problem. That alone would require laying down ~50,000 miles of track, requiring God knows how many tons of steel, trainyards, and workers. And it would take days to travel there with connections, stopovers, etc. Those are all frictions. And once you laid it all down, suppose you didn't want to go to Miami, but to Corpus Christi. Thus air travel allows places to spring up in response to market demand, whereas in the old days, cities along the track became the important centers -- e.g. development was infrastructure constrained rather than allowing the infrastructure to meet the needs of development flexibly and quickly. That increased flexibility and convenience, together with the reduced frictions of point to point travel provides trillions of dollars in positive externalities. [1] https://medium.com/geophy-hq/airports-as-a-positive-externality-82325130d41f https://medium.com/geophy-hq/airports-as-a-positive-external... [2] https://www.faa.gov/air_traffic/publications/media/2014-economic-impact-report.pdf https://www.faa.gov/air_traffic/publications/media/2014-econ...

by rsj_hn 5y ago

PaulDavisThe1st 5y ago

The subsidies reflect the belief/position/ideology that the train brings a net benefit to all of society, and so should be paid for by everyone, not just those who ride. This is intended to be in contrast to flying, which brings more costs than benefits. You can certainly argue that these beliefs are incorrect if you feel like it, and it's not as if there isn't a case to be made. But it's not just a simple matter of "we tax this, and subsidize that".

rsj_hn 5y ago
The parent post I was responding to was saying that the reason trains cost more is that that aviation was being subsidized at the expense of trains. That's just wildly incorrect. They supported that position by taking one out of context fact. I remedied that by providing the overall context. I was not making a judgement as to whether trains should be subsidized or not. That's a whole separate discussion. But since you bring it up, I'd say that in general, transportation of all kinds provides such massive positive externalities that it should probably be subsidized. Then we can debate how much more trains should be subsidized over airplanes, but both create massive net positive externalities, IMO.
- PaulDavisThe1st 5y ago
  I think it's really hard to argue that for planes. In saying that I don't mean that I think it's clearly not true. I mean that the case for net positive externalities for air travel is dependent on things like (a) the geographic scope you consider (b) the temporal scope you include (c) value judgements about time-efficient travel and much more. One could legitimately take quite opposite positions on all these aspects (and more), and would end up reaching very different conclusions. Something like this applies to trains also, but much less so because their inherent geographic scope, environmental impact, sociological impact and effects on reducing travel time are much less than flying.
  - rsj_hn 5y ago
    So you are correct that externalities is something that is really ill-defined, which is why all claims to impose externality-based taxes should meet a high bar of rigor. In most cases, that's just impossible and the taxes end up being applied for political or emotional reasons rather than objectively taking all costs and benefits into account. But when it comes to a few areas, we know that there are massive positive externalities in anything involving transportation or communication. Anything that makes the world smaller generally has big positive effects. Even if you never buy a foreign good, the fact that a good was brought in will lower the price and raise the quality of the domestic good you do buy. That generates employment and income. Anything that lowers the price of bringing in that good will have a huge positive effect on the economy. With planes, the fact that they make transportation easy and affordable generates massive revenue for tourism, trade, employment. European Airports alone generate about 675 Billion in GDP -- 4% of the EU's GDP when both passenger and freight is taken into account[1]. And that's just airports. An older FAA study concludes that civil aviation generates 5.4% of US GDP[2] and that's a fairly conservative study not even trying to measure too many spillovers. Then there is a third effect, which is the superiority of point to point designs. Miami Beach was developed in the 30s and 40s because some developers saw its potential as a great beach destination. But it was only with plane flight that the rest of the nation had a chance to enjoy it. Or Las Vegas, another center that sprang out of nowhere. The fact that I can fly from pretty much anywhere in the country to Miami for $100 massively increases the tourism trade to Miami Beach. To do that with rail, you'd have to overcome n^2 problem. That alone would require laying down ~50,000 miles of track, requiring God knows how many tons of steel, trainyards, and workers. And it would take days to travel there with connections, stopovers, etc. Those are all frictions. And once you laid it all down, suppose you didn't want to go to Miami, but to Corpus Christi. Thus air travel allows places to spring up in response to market demand, whereas in the old days, cities along the track became the important centers -- e.g. development was infrastructure constrained rather than allowing the infrastructure to meet the needs of development flexibly and quickly. That increased flexibility and convenience, together with the reduced frictions of point to point travel provides trillions of dollars in positive externalities. [1] https://medium.com/geophy-hq/airports-as-a-positive-externality-82325130d41f https://medium.com/geophy-hq/airports-as-a-positive-external... [2] https://www.faa.gov/air_traffic/publications/media/2014-economic-impact-report.pdf https://www.faa.gov/air_traffic/publications/media/2014-econ...