French Government Surrenders On Fuel Tax Increase
French President Macron went from saying he’d never give in to attempting to negotiate (but there was no actual leader to talk to) to putting a hold on the fuel tax increase for 6 months to surrender. But, don’t think it is a permanent surrender
The French government has bowed to gilets jaunes (yellow vests) protesters and abandoned the fuel tax rise that has sparked more than three weeks of violence and seen parts of central Paris in flames.
Just a day after announcing a six-month freeze on the eco-tax, the Elysée Palace declared it was dropping the measure from the 2019 budget.
Hours earlier, the prime minister, Édouard Philippe, had said his government was prepared to reconsider the tax if other solutions could be found to make the transition to cleaner fuel without hitting people in their pockets, as he spoke to MPs during a debate on next year’s finance bill in the Assemblée Nationale.
In a statement on Wednesday evening, the Elysée said that Philippe and the president, Emmanuel Macron, “both wished the increase in the carbon tax be removed” from the budget for 2019.
“The citizen and parliamentary debate in the coming weeks and months will have to find solutions and funding that will meet the challenges of the ecological transition; solutions that will preserve the purchasing power of our citizens,” it added.
See? They won’t be giving up on Doing Something in regards to ‘climate change’, so, expect the taxes to be hidden somewhere.
The government is also looking to find ways to reduce the power bills of citizens after decades of the government being a big cause of rising energy prices
The government also said it would prevent state-controlled EDF from raising its regulated power prices this winter, but rivals said they would challenge that decision in court.
Earlier government attempts at freezing prices have been overruled.
Household power prices are set by independent energy regulator CRE using a formula that includes the price of power generation, transport and distribution. A third part of the retail price is made up of taxes.
“What is being discussed is that the share of taxes in the power price could be reduced in order to compensate for an increase in the generation cost, which on balance would keep prices stable,” said one of the two sources.
The government could lower the valued-added tax (VAT) or so-called CSPE tax, which stands at 22.5 euros per megawatt-hour and raised 3 billion euros ($3.40 billion) this year. Money from that tax also funds power subsidies for low-income families.
An energy ministry official told Reuters that the government was looking at ways to stabilize power bills but said that no final decision had been taken yet.
Government is good at messing things up and increasing your costs but not so good at being able to fix their mess.