Airline Tax Proposal Falls Short

President Chirac's proposal for a global air travel ticket tax to fund development appeared to be gaining momentum last week, with an announcement at the Clinton Global Initiative meeting in New York that four countries had joined the French-led initiative. One important question--how the money will be used--has been answered. Ninety percent will go to buy AIDS drugs. But plans for administering the funds are unlikely to persuade American taxpayers--or the U.S. government--to support the plan.I goofed when I urged the U.S. to get on board in a previous posting featured in the weekly CGD Development Update. I thought--mistakenly--that money raised by the initiative would be administered to the Global Fund to Fight AIDS, Tuberculosis and Malaria. I have since learned that a new entity has been established to administer the funds, and that most will be used to purchase the drugs directly from the manufacturers. (For details, see Ruth Levine’s recent posting, All the Health that Money Can Buy )American taxpayers might well endorse a modest tax on air travel to fund medicines for AIDS and other killer diseases in the developing world. But only if they can hold some institution fully accountable for the responsible and effective use of the revenue. As currently constituted, the airline tax proposal falls short.