EIB survey: 53% of respondents for an additional tax

The results of the sixth edition of the European Investment Bank’s (EIB) annual climate survey, published on November 28, show that respondents in Luxembourg consider the increase in the cost of living, inequality of income and climate change as the three biggest challenges facing the country. Just over four in ten (42%) respondents say the government should tackle climate change, even if it affects their personal budget. Three quarters of those surveyed in Luxembourg (77%) say that the transition to a low-carbon economy can only be achieved if inequalities are tackled at the same time.

“The people of Luxembourg are aware that a successful transition towards a climate-neutral world goes hand in hand with the fight against social and economic inequalities on both a national and global scale,” said Kris Peeters, vice-president of the BEI, in a press release. “The European Investment Bank is fully committed to supporting a just transition that leaves no one behind. Solidarity and concrete measures are more important than ever.”

The survey also included hypothetical questions relating to taxation and climate change policies. Here are some lessons learned from the investigation.

Half of respondents are ready to pay more taxes

According to the survey, just over half (53%) of respondents in Luxembourg would be willing to pay additional taxes on their annual income to finance climate policies benefiting people with lower incomes than themselves. This figure is six percentage points lower than the EU average (59%), two percentage points lower than Germany (55%) and the same as Belgium, France and the -Low (53%).

Compared to the EU average (59%), this figure is even higher in the United States (67%), China (90%) and India (89%), and roughly equivalent in Japan (58%).

What is the exact amount of tax?

Around one in four people surveyed (24%) in Luxembourg would be willing to pay a tax of 1% of their annual income to finance climate policies benefiting low-income people. 19% would be willing to pay a tax of 2% of their annual income; 9% would pay a tax of 5% of their annual income; and 1% of them say they are ready to pay a tax of 10% of their annual income.

75% of respondents support carbon-related wealth tax

The survey found that two thirds of respondents in Luxembourg (64%) would agree with a progressive tax on carbon emissions. “This means that people who earn more would pay a higher tax rate when they buy products such as gasoline, to help fight climate change. People who earn less would pay a lower tax rate,” the survey said.

75% of respondents in Luxembourg would agree with a carbon wealth tax, meaning “the more people or businesses make money from activities that harm the environment, like mining or the use of fossil fuels, the higher their taxes”.

Three quarters (73%) of those surveyed in Luxembourg would be in favor of a reform of fossil fuel taxation, that is to say the elimination of subsidies and tax advantages granted to companies which use fossil fuels and the air Transport.

Young people and the upper class more willing

Respondents in Luxembourg aged 20 to 29 are most likely to pay more taxes to finance climate policies, according to the survey, followed by respondents in the 15-19 age group (62%) .

Upper-class respondents are also more likely to agree to pay additional taxes to fund climate policies that benefit people with lower incomes.

The EIB’s sixth annual climate survey aims to explore attitudes and expectations on climate action. This year, a representative panel of 30,000 people were surveyed from August 7 to September 4, 2023 in 35 different countries: the 27 countries of the European Union, the United Kingdom, the United States, Canada, China, India, Japan, South Korea and the United Arab Emirates.

Full results of EIB climate survey available ici.

This article comes from the Delano Finance newsletter, the weekly meeting to follow financial news in Luxembourg, in English and French. You can subscribe by following this link. You can read this article in English on delano.lu.