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By definition, low taxes are not a subsidy. It is the trains that are heavily subsidized. The main reason behind the price difference is that there is plenty of

by Hermel 4y ago

By definition, low taxes are not a subsidy. It is the trains that are heavily subsidized. The main reason behind the price difference is that there is plenty of competition between airlines for a given flight, eg Paris-Berlin, but no competition for the same train connection.

Ma8ee 4y ago
The argument that lower taxes isn't a subsidy is just stupid. It makes absolutely no meaningful difference if someone pays the same taxes as everyone else but then the government pay them some money, or if someone pays correspondingly lower taxes. In the end the recipient ends up with exactly the same amount of more money, and the government ends up with exactly the same amount of less money.
- zdragnar 4y ago
  > and the government ends up with exactly the same amount of less money. Minus overhead
  - Ma8ee 4y ago
    What overhead? Do you really think it makes any significant difference versus recalculating the taxes?
namdnay 4y ago
Flag-carrier Airlines are heavily subsidized by the implicit guarantee that the state will do everything it can to bail them out
jhgb 4y ago
> By definition, low taxes are not a subsidy. The conspicuous lack of Pigouvian taxes on a fossil fuel for just one industry is definitely a subsidy. Someone else is paying for the externalities.
- deleted 4y ago
  [deleted]
- xyzzyz 4y ago
  No, nobody is actually paying for CO2 emission externalities. At best, you can argue that maybe someone will be paying them some day in future, but it’s a big fat maybe. Because nobody is actually paying for these externalities, we don’t have any figures of how much those externalities cost — you can come up with some estimates, but as GOSPLAN experience shows, calculating prices outside of markets is a fool’s errand. Moreover, our best estimates of these costs is rather low, especially if you do time discounting. Planes would still be cheaper than trains even if they had to pay these. Finally, since most of electricity in Europe still comes from fossil fuels, emission externalities are just as much of a problem for them as they are for trains, especially if you consider that the GHG emissions per actual passenger kilometer between trains and planes are rather similar: trains tend to be really heavy, and usually run much more empty than planes.
  - sudosysgen 4y ago
    People are already paying for those externalities in extreme weather events caused by CO2, also from carbon taxes in other countries that wouldn't have been necessary otherwise, from people who have to buy more expensive cars and fuel, etc...
    - xyzzyz 4y ago
      > People are already paying for those externalities in extreme weather events caused by CO2, And others are benefitting from positive externalities of warmer weather, reducing need for heating, increases yields due to increased CO2 concentration etc. Thing is, it’s incredibly hard to put a number on net costs on climate change. The most serious recent attempt to do that had its author, William Nordhaus, a Nobel Prize in Economics. The estimated figure, by the way, is very low compared to the zeal of the activists. Now, of course, the carbon tax proponents are not really interested in the actual costs. They either ideologically hate emissions, and their desire to institute carbon tax is vindictive in its nature, and all talk about “externalities” is for them just a distraction, or they are politicians who use carbon tax as an excuse to increase their political power and tax revenues. Nobody is motivated by actual economic efficiency, and calling them Pigouvian taxes is a distraction.
pc86 4y ago
They are if other industries consuming the same product pay different tax rates. In this example, an airline purchasing 1L of kerosene pays a different rate than a train purchasing the same 1L of the same kerosene. That's the textbook definition of a subsidy.
- robocat 4y ago
  Can you find any information showing that most European trains pay tax on diesel? Plenty are electric, so any tax would be indirect. This report seems to show that trains mostly pay for infrastructure and the network: https://cedelft.eu/wp-content/uploads/sites/2/2021/03/CE_Delft_4K83_Transport_taxes_and_charges_in_Europe_Final.pdf https://cedelft.eu/wp-content/uploads/sites/2/2021/03/CE_Del... I think British trains pay for “red” taxed diesel?
  - Symbiote 4y ago
    Good find! The "Diesel tax levels" charts (p28, p81) show the UK charges the same (0.7€/L) for both road and rail use, and most EU countries charge a tax, although more than half have less tax for rail than road use. Electricity is taxed in a few countries.

by Hermel 4y ago

Ma8ee 4y ago

The argument that lower taxes isn't a subsidy is just stupid. It makes absolutely no meaningful difference if someone pays the same taxes as everyone else but then the government pay them some money, or if someone pays correspondingly lower taxes. In the end the recipient ends up with exactly the same amount of more money, and the government ends up with exactly the same amount of less money.

zdragnar 4y ago
> and the government ends up with exactly the same amount of less money. Minus overhead
- Ma8ee 4y ago
  What overhead? Do you really think it makes any significant difference versus recalculating the taxes?

namdnay 4y ago

Flag-carrier Airlines are heavily subsidized by the implicit guarantee that the state will do everything it can to bail them out

jhgb 4y ago

> By definition, low taxes are not a subsidy. The conspicuous lack of Pigouvian taxes on a fossil fuel for just one industry is definitely a subsidy. Someone else is paying for the externalities.

deleted 4y ago
[deleted]
xyzzyz 4y ago
No, nobody is actually paying for CO2 emission externalities. At best, you can argue that maybe someone will be paying them some day in future, but it’s a big fat maybe. Because nobody is actually paying for these externalities, we don’t have any figures of how much those externalities cost — you can come up with some estimates, but as GOSPLAN experience shows, calculating prices outside of markets is a fool’s errand. Moreover, our best estimates of these costs is rather low, especially if you do time discounting. Planes would still be cheaper than trains even if they had to pay these. Finally, since most of electricity in Europe still comes from fossil fuels, emission externalities are just as much of a problem for them as they are for trains, especially if you consider that the GHG emissions per actual passenger kilometer between trains and planes are rather similar: trains tend to be really heavy, and usually run much more empty than planes.
- sudosysgen 4y ago
  People are already paying for those externalities in extreme weather events caused by CO2, also from carbon taxes in other countries that wouldn't have been necessary otherwise, from people who have to buy more expensive cars and fuel, etc...
  - xyzzyz 4y ago
    > People are already paying for those externalities in extreme weather events caused by CO2, And others are benefitting from positive externalities of warmer weather, reducing need for heating, increases yields due to increased CO2 concentration etc. Thing is, it’s incredibly hard to put a number on net costs on climate change. The most serious recent attempt to do that had its author, William Nordhaus, a Nobel Prize in Economics. The estimated figure, by the way, is very low compared to the zeal of the activists. Now, of course, the carbon tax proponents are not really interested in the actual costs. They either ideologically hate emissions, and their desire to institute carbon tax is vindictive in its nature, and all talk about “externalities” is for them just a distraction, or they are politicians who use carbon tax as an excuse to increase their political power and tax revenues. Nobody is motivated by actual economic efficiency, and calling them Pigouvian taxes is a distraction.

pc86 4y ago

They are if other industries consuming the same product pay different tax rates. In this example, an airline purchasing 1L of kerosene pays a different rate than a train purchasing the same 1L of the same kerosene. That's the textbook definition of a subsidy.

robocat 4y ago
Can you find any information showing that most European trains pay tax on diesel? Plenty are electric, so any tax would be indirect. This report seems to show that trains mostly pay for infrastructure and the network: https://cedelft.eu/wp-content/uploads/sites/2/2021/03/CE_Delft_4K83_Transport_taxes_and_charges_in_Europe_Final.pdf https://cedelft.eu/wp-content/uploads/sites/2/2021/03/CE_Del... I think British trains pay for “red” taxed diesel?
- Symbiote 4y ago
  Good find! The "Diesel tax levels" charts (p28, p81) show the UK charges the same (0.7€/L) for both road and rail use, and most EU countries charge a tax, although more than half have less tax for rail than road use. Electricity is taxed in a few countries.