COMMON ENERGY-TAX CEILING FOR EUROPE PROPOSED

Nov. 21, 2000
An energy meeting this month in Riyadh, Saudi Arabia, flushed an idea out of Europe's bureaucratic bushes that should chill the oil and gas industry.

An energy meeting this month in Riyadh, Saudi Arabia, flushed an idea out of Europe's bureaucratic bushes that should chill the oil and gas industry.

Loyola de Palacio, a European Commission vice-president, proposed an international ceiling on European energy taxes.

"We have a common minimum level at present," the Bloomberg news service quoted her as telling reporters. "But I believe we also need to introduce a maximum level."

At first glance, de Palacio's suggestion seems like a compromise with oil-producing countries rankled at Europe's stratospheric taxes on petroleum products.

Oil exporters have long complained about taxation systems such as that of France, where excise and value-added levies at times have accounted for more than 80% of the price of motor gasoline in recent years. The percentage is about 70% at present because of the elevated cost of crude oil.

The producing nations say Europe's heavy taxation of oil products hurts demand for their crude.

De Palacio didn't recommend a value for the common tax ceiling.

"It doesn't allow for a harmonious situation when each member can set its own fuel tax ceiling," she said.

Even though she's talking about a tax limit, such talk should worry oil and gas companies. It should worry oil and gas consumers.

Establishment of an international taxation authority is one of the worst among many bad ideas circulating in discussions about precautions against global warming.

Free people do not submit without a fight to taxation by authorities whom they did not elect. This tenet of democratic governance supersedes lower-order political meanderings of modern life, including environmental alarmism and Europe's socialistic yearnings.

Indeed, even among supertaxers, national sovereignty has its proponents.

"Taxation is a matter for individual member states," declared Helen Liddell, energy minister of the UK, at the Riyadh meeting.

Taxes in her country now represent three quarters of the price of gasoline.