Montrouch Organic

Macron’s regressive diesel tax hike

Diesel now 1.41 a litre. Now it has to be said that I am no major fan of Macron, France’s Teflon President. But the recent massive rise in diesel prices has plunged my opinion even lower.
Why you may well ask, urban diesel is a known killer, while diesel vehicles emit less CO2 that their petrol equivalents they do pump out Nitrogen oxides and dioxides and particular matter that in urban environments are major contributors to air pollution. As Adam Forrest wrote in April 2017 in The Guardian;
“The cracks took a long time to appear, but when they did they splintered rapidly. In 2012 came the first major evidence of some truly dreadful health impacts. Nitrogen oxides and dioxides (NOx) and particulate matter (PM) pumped out by diesel exhausts were fingered as silent killers. The studies multiplied. The European Environment Agency found that nitrogen dioxide (NO2) from diesel fumes had caused around 71,000 premature deaths across the continent in a single year. It said the UK experienced 11,940 annual premature deaths from NO2, the second highest in Europe behind Italy. The World Health Organisation declared diesel exhaust a carcinogenic, a cause of lung cancer in the same category as asbestos and mustard gas.”
The actions by the Mayor of Paris to ban diesel vehicles from the centre of the city by 2025 is therefore to be welcome. I remember from my old Vivendi days looking out from my tower block in La Defence over Paris on a summer’s day, and seeing the thick black layer of smog that covered the Paris basin. London was little different, after a day’s work in the City the collar of my shirt was often coated in a grimy black ring.
So yes major action to improve urban air quality desperately needs to be taken. A renewed commitment to affordable, environmentally sustainable public transport, close work with the manufacturers to support research into alternative energy for vehicles; support to develop the infrastructure for alternative energy vehicles,, and aid to drivers to swap out their polluting old diesel cabs, vans and cars for affordable low emissions vehicles are all to be welcome. What is needed is a holistic comprehensive, and coherent range of policies that tackle the huge challenges faced by the transition to a sustainable economy.
Is this happening in France? Nope. Despite lots of hot air and nice sounding sound bites from the political classes their approach to the problem is piecemeal, incoherent and just not joined up.
So back to my moan about the New Year hike in diesel prices. Below is the range of diesel prices since October 2017.
Year France
02-oct-2017 1,27
09-oct-2017 1,25
16-oct-2017 1,25
23-oct-2017 1,24
30-oct-2017 1,26
06-nov-2017 1,27
13-nov-2017 1,29
20-nov-2017 1,29
27-nov-2017 1,29
04-déc-2017 1,28
11-déc-2017 1,28
18-déc-2017 1,29
25-déc-2017 1,29
01-jan-2018 1,4
08-jan-2018 1,41
The huge 11 cent per litre hike in January is caused by a rise in taxes not supply. The government is justifying this rise citing environmental concerns. This, if you will pardon the expression is just a smoke screen. The government is in a serious crisis, one which has been on going ever since France joined the Euro. The European Central Bank has strict rules about the size of the annual public debt of the Eurozone’s members. After the financial crisis that bankers greed plunged the world into these were eased on a case by case basis, but France, even before  the crash was always way over it’s ‘permitted’ budget. Fuel taxes are the state’s fourth largest money earner, with VAT being it’s single largest.
Fuel prices, like VAT are a classic regressive tax.
To quote Wikipedia ” In terms of individual income and wealth, a regressive tax imposes a greater burden (relative to resources) on the poor than on the rich: there is an inverse relationship between the tax rate and the taxpayer’s ability to pay, as measured by assets, consumption, or income. These taxes tend to reduce the tax burden of the people with a higher ability to pay, as they shift the relative burden increasingly to those with a lower ability to pay.”
Diesel taxes hit poorer people harder. I would also add that diesel tax hit  rural populations harder that urban ones. the lack of public transport means that rural communities are much more dependent on our own vehicles that urban ones. Farmers who use diesel fueled machinery, workers who commute to work, just getting to the shops to buy food, the cost for the local delivery and food sellers who sell from their vans are all hit by these taxes. Yes farmers have access to red diesel, but here in the Haut Corbieres red diesel is the same prices as supermarket diesel, so no great shakes on that front.
Here at the Domaine de Montrouch diesel, after state taxes and MSA, is our single largest cost, not seeds, nor soil, nor pots, diesel. When we descend to do our markets in Lezignan, Perpignan, and Narbonne the largest cost is not the price of the stand but the diesel to get us there. So like everyone around here you go out rarely, you combine all the necessary jobs on one trip, doing markets, shopping, buying materials, paying bills. You shop for your neighbours, and they for you. You stop for hitchhikers.
If the government had a coherent plan to reduce pollution and move to a sustainable economy and the rise in diesel prices was a small part of that then I could support it. It hasn’t and this diesel price hike is not part of a wider plan. It is one more attack on the rural poor from a long distant urban elite, no amount of green frippery disguises it.

5 thoughts on “Macron’s regressive diesel tax hike

  1. veronique

    going on with my preceeding comment, just an example : the minimum income for old peopl is set up at 800€/mo. Macron&co promised to increase it by 100 €/mo. this measure will be put in place over 3 years, starting only in April 2018 !!!… but that’s not my point. With a 900 €/mo income you automatically fall into the 14% taxable income bracket, so : 900 € x 14% = 126 € = 26€ over the promised “increase”, or an actual loss of 26€/mo !!!!… and we could go on like this with quite many examles…

    1. Steve Cracknell

      While one might doubt Macron’s environmental credentials the proposed increase in minimum income will definitely benefit poor people.
      Sorry Veronique but your calculations are mistaken. In France we currently have a tax-free allowance of 9807 euros. It is only the income ABOVE that figure that is taxed at 14%. In this case with an income of 900 euros/month = 10800 euros per year, you would be taxed on 993 euros at 14% = 139,02 euros ie about 12 euros/month, not 126 euros. There are other factors but they don’t change the overall principle.

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