The Approaching Free Gift Strategy

I sat and watched a brief news piece today which chatted over the impending (probably two to three years away) CO2 tax. 

For several years, the EU had stood opposing the idea of a CO2 tax.  In the past couple of months....that opposition has wrapped up.  So what's going to happen is a EU-wide CO2 tax, which will arrive for cars/truck/buses/motorcycles, heating/cooling of homes/apartments/hotels, and agricultural production.  The numbers?  Yet to be figured out and that fact might create this long discussion (maybe leading to fours years of research and discussion). 

It basically means that some tax idea will be created to create this massive taxation funnel.  So you might sit there and get a registration form for your yearly motorcycle tag, and here's a 19-Euro CO2 tax.  Then you'd get a airline ticket from Frankfurt to Thailand, with a 72-Euro CO2 tax attached.  Then you'd go to the grocery store and find that the bottom of the receipt includes a 4.50-Euro CO2 tax in the mix.  Then you'd go and find the landlord talking over your heating bill, and the 98-Euro CO2 tax for your yearly fee.  Then you'd call up your beer distributor company....to order the half-pallet of beer for your birthday party, and the CO2 tax is figured in and comes to around 16-Euro. 

By the time the year ends, you've contributed around 500 Euro into this pot.  Those folks with the big houses, the four BMWs in the garage, taking the three international trips a year.....will have contributed at least 2,000 to 10,000 Euro. 

Even the farmer with wheat production, and various pieces of equipment he has to operate....will be paying this CO2 tax.

So this money rolling into a big pot....into the billions.  What becomes of that?  Well, that's the funny part of this discussion.

The Finance Minister (from the SPD Party) has said that it should be redistributed back out to public programs ('gifts', we could say).  There might be an opera hall or two, but a lot of this would be city park money, welfare funding, educational funding, etc.  The rich who would use a hefty amount of money?  They would be throwing a fair sum of CO2 cash into this pot and get little-to-nothing in return. 

One might go and assume that if you did this across the EU, there would be nowhere to escape to (to leave Germany and relocate into Czech or Hungary).  But this brings up the other issue....while a lot of Germans might be willing to just accept this part of life, that feeling isn't shared in countries like Greece or Italy.  One might assume that even if the CO2 tax is voted into acceptance....the first five to ten years will be half or even a quarter of what the Germans are anticipating.  So that 'Robin Hood' bandit redistribution idea would be fairly limited in benefiting people. 

I should note as well....you might see several hundred thousand people of 'wealth' (CO2 creators)....who just come to realize the true impact on their finances, and leave the EU. 

So if people are dumping this into another taxation pot....what's this add up to when you look at general salaries, general income taxes, pensions, medical cost, property taxes, car taxes, sales taxes, etc?  That's the unknown.  My guess is that for the common working-class guy, it probably can't go above two-percent of his total income for the year.  And in some fashion.....the return of distribution has to be really benefiting people.

The possibility of zero CO2 taxes upon a guy?  The guy living under the bridge, will still have to buy food somewhere unless he has a personal garden. 

The driving tool for free train tickets?  Yes, if you haven't figured that part out.....this is probably one of the top ten things will come out of the CO2 deal.  Money for affordable housing seizures in Berlin?  More than likely.  Paved bicycle trails throughout Germany?  Yes, it'll come.  Distribution via EU 'gifts'?  Very likely. 

But then you come to general wealth of people living in non-EU countries (like the US, Canada, Australia, etc)....they will make more take-home pay, unless some public acceptance comes around to CO2 taxes as well.  Selling this in the US?  No....I have my doubts that you can convince the public to buy into this idea. 

So the cost of doing business....making things to sell outside of the EU....and tourism, will all suffer to some degree, but everyone will rave about the free gift strategy.