In addition to murdering tens of thousands of Ukrainians and causing mass destruction, Russia’s unprovoked and malevolent invasion is costing Europe a lot too.
Ukraine is the dam blocking the Russian torrent from inundating Europe. Consequently, Europe has been forced to spend hundreds of billions of dollars to buttress Ukraine’s defense. Moreover, the manifest Russian threat is now forcing the EU, the UK, and other European nations to launch large scale rearmament programs that are going to cost European taxpayers trillions.
As the cause of all these costs, Russia should be made to pay the bill.
The way to do this is straightforward. All goods being imported or exported from Russia should be taxed.
The one thing that the governments of the EU know how to do well is tax. Moreover, the EU is in an excellent position to tax Russian imports and exports, because all ships entering or leaving Russia via the Baltic and the Aegean must thread their way through waterways that are completely under EU nation control. Using satellite technology, it is possible to know which ships dock at Russian ports. All such ships heading to or from Russia should be required to stop at designated EU ports and pay the tax.
While in an ideal world it might be desirable to tax Russian goods right out of the global market, from a practical point of view such a policy would not work. Until such time as the Europeans wake up and start fracking their abundant shale oil and gas resources, the world is going to need Russian oil and gas.
But in the marketplace cash is king. It is the buyers, not the sellers, who hold the whip hand. So long as the terms of the sale are better than no sale at all, the seller has no choice but to submit. All Europe needs to do to get the deal it wants is to take a firm and skillful hold of the whip.
So, while material, the tax needs to be tolerable. I would set it at 25%. That is approximately what most EU nations charge their own consumers via their Value Added Tax (VAT). So the EU should also impose a 25% Russian Value Added Tax (RVAT) on anything going in or out of Russia. Oil is now selling around $88 per barrel. So, the tax on Russian oil would be $22 per barrel. That leaves the Russians still netting $66 per barrel, which is unfortunate, but at that price they could certainly not refuse to do business. If the oil costs them $44 per barrel to produce, their profit on the sale would be cut in half. Moreover, the impact on Russia’s overall finances would be greater still, because everything they import would cost them more as well.
Oil tankers range in capacity from 300,000 to 3 million barrels. At $22 per barrel, a mid-sized one carrying 1 million barrels would need to pay a $22 million tax. That is more than the Iranians propose to charge to allow passage of ships through the Gulf. But business is business, and Europe is going to need a lot of money to both rearm and keep supporting Ukraine without damaging its social safety net.
But what if some ships refuse to go to the RVAT collection ports? The answer to that is simple. Tax-evading ships should be subject to confiscation, in toto, as contraband, along with all their goods. The Europeans could easily do this using their navies, as small as they are. Alternatively, the task of seizing the contraband ships could be outsourced to ships outfitted by private entrepreneurs, who unquestionably would enthusiastically lend their support to the process of revenue collection enforcement in exchange for a suitable piece of the action.
The RVAT would not just be a good way to shore up EU budgets, as pleasant as that prospect is. It would also provide a zero-cost way to protect Europe from the threat of Russian ballistic missiles.
Consider this. In 1944-45, the Nazis fired some 3,000 V-2 ballistic missiles at England. As these missiles were hypersonic, there was no virtually defense against them. Except one, which proved very effective. The Allies stopped the V-2 attacks on England by putting Nazi Germany out of business.
Similarly today, the western democracies are racing to try to establish Patriot production lines to provide them with some semblance of protection against Putin’s ballistic terror weapons. But as commendable as such initiatives might be, they have limited utility, because it is much easier and cheaper to build a rocket that can hit a city than one that can hit an incoming missile in mid-flight. It would be much more effective, and far less expensive, to stop the threat by putting Fascist Russia out of business.
By imposing the RVAT, Europe can drain the blood out of Russia’s war economy while providing Ukraine with everything it needs to prevail. Then, instead of wasting vast sums on armaments, Europe will be in a position to demand that Russia disarm.
Only then will there be peace.
Dr. Robert Zubrin, an aerospace engineer, is president of The Mars Society and author of 13 books, including most recently The New World on Mars: What We Can Create on the Red Planet, Diversion books, 2024. The New World on Mars: What We Can Create on the Red Planet: Zubrin, Robert: 9781635768800: Amazon.com: Books