Could cheap flights in Germany receive a 'penalty tax'?

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Could cheap flights in Germany receive a 'penalty tax'?
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The CSU state group in the Bundestag is demanding a "penalty price tax" on cheap flights within Europe in order to cut carbon emissions, according to a Friday media report.


Want to fly from Berlin to Venice for €8? Budget airlines such as EasyJet and RyanAir have made this possible with very low fairs.

But now a paper, to be presented at a retreat of the CSU, the Bavarian sister party of Chancellor Angela Merkel's Christian Democrats (CDU) next Tuesday, is proposing that flights costing less than €50 be subject to a penalty tax, according to BILD.

The exact amount of the tax is not yet known. 

"I want climate protection instead of competitive prices,” CSU leader Alexander Dobrindt told the newspaper.

“€9 tickets for flights in Europe have nothing to do with a market economy or climate protection. We want real freedom of choice in mobility through sustainable pricing of offers."

The CSU, Germany’s third largest political party and dominant party of Bavaria, therefore wants to introduce a minimum price for airline tickets, according to the newspaper. All flights under €50 would be subject to the penalty tax, to be paid by consumers.

"Flying needs a minimum price and rail travel needs a reduction in VAT (an added tax of 19 percent)," Dobrindt said.

The proposal follows on the heels of the Green party’s proposal to put a complete end domestic flights in Germany in order to cut carbon emissions and incentivize more people to travel by train.

READ ALSO: Trains instead of planes? Could domestic flights in Germany really become obsolete?

Hurting consumers?

The federal government's aviation commissioner, Thomas Jarzombek, rejected the CSU's demands, saying it would ultimately harm lower income passengers.

"We agreed in the coalition agreement not to increase taxes,” the CDU politician told DPA. “It must also be carefully examined whether such a regulation would simply lead to planes flying empty and people with low incomes losing mobility without saving CO2". 

The Federal Association of the German Air Transport Industry (BDL) was open to the discussion, however. 

"In principle, there should be no objections if the politicians were to find an adequate way to put a stop to uneconomical low prices and artificially inflamed demand", Chief Executive Matthias von Randow told DPA.

'Climate tax bonus'

The CSU is looking at additional incentives in order to cut carbon emissions, as CSU leader Markus Söder proposed a climate tax bonus of up to €10,000 on Friday.

 "We want a climate bonus, which means that climate protection measures should be tax-deductable up to a sum of €10,000," said the Bavarian Prime Minister to the "Augsburger Allgemeine" on Friday. 

"Each person would be able to deduct 20 percent of the costs directly from income tax if he saves energy - for example by installing a climate-friendly heating system.”



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