This Tax Certainly Needs To Be “Bagged.”

How could anyone be against a plastic bag ban? It’s a great way to save money while saving the environment, right?

If this statement were true the government wouldn’t have to prohibit people from using a plastic bag, people would choose to do so without coercion. The shortcomings of the Washington, D.C. bag tax are numerous due in part to the ill-conceived premise of banning or taxing a consumer’s choice to use a plastic bag.  In March 2012, TPA noted the shortcomings of the bag tax.  D.C.’s experience has been a complete failure.  According to a report by Americans for Tax Reform and the Beacon Hill Institute, “the bag tax will result in the elimination of more than 100 local jobs and precipitate a $5.64 million decline in aggregate disposable income for 2011. The majority of this income would have been spent in the District and, as a result of the bag tax, D.C. will now needlessly forgo an additional $108,340 in sales tax revenue and will see investment drop by $602,000, with the bulk of the loss occurring in the retail sector.”  The obvious scenario is that people will shift their purchasing behavior to patronize stores that are outside the geographical area of the tax.

Seattle’s local government went even further; instead of taxing the bags, it out right banned them.

Let’s set aside the inherent flaw of the bag tax in that it empowers the government to infringe on a person’s ability to choose what type of bag they’d like to use to carry their groceries and other purchased goods.  Instead, let’s take a look at something that’s far too often forgotten within the supposedly altruistic green movement.  The fact that always seems to be conveniently overlooked is that nothing comes for free.  There’s a cost associated with everything; be it tangible or intangible.  So for example, although the greenies won the anti-plastic bag crusade, their win comes at the expense of Seattle’s grocers who are left paying for the greens supposed victory.

Don’t be fooled, grocers aren’t voluntarily choosing to pick up the tab.  Rather it’s the thieves who steal their products that are the agents leaving the markets with significant costs to bear.

Seattle Post Intelligencer highlighted a few of the ramifications of the bag ban.  The article noted, the bag ban contributes “to thousands of dollars in losses for at least one Seattle grocery store, and questions have been raised about the risk of food-borne illness from reusable bags that shoppers don’t often wash. Mike Duke, who operates the Lake City Grocery Outlet with his wife, said that since the plastic-bag ban started last July, he’s lost at least $5,000 in produce and between $3,000 and $4,000 in frozen food… The Dukes opened the Lake City grocery store in June 2011, and Mike Duke said in the year before the plastic-bag ban losses in frozen food and produce were a small fraction of what he’s seeing now.”  Making matters even worse and increasing the difficulty to stop the thefts, Duke noted that the “shoplifters’ patterns are difficult to detect.”

Despite this reality, some of the local elected officials totally miss the problems the ban causes.  For example, Councilman Mike O’Brien remarked, “I think we’ve gotten to a place where it’s really going to work for the environment, businesses and the community in general.”  Talk about being out of touch.  And while we’re on the topic of being out of touch, Seattle and Washington, D.C. experiences are not enough to stop Maryland from attempting to become the first state to implement a statewide 5-cent bag charge.

The Washington Post recently reported about the alarming trend that many states have begun considering.  “The [Maryland] fee, which would apply to plastic and paper bags, comes as at least five other states — Hawaii, New Jersey, New York, Vermont and Washington — contemplate a similar charge. At least six states — Arkansas, California, Florida, New Jersey, Oregon and Rhode Island — are considering banning all disposable bags.”

It’s very important that taxpayers become more involved in these debates.  While a bag ban or tax may seem paltry, it opens the door to a very slippery slope for additional coercive forms of government to flow freely through.  What’s next, Big Gulps?  Nah, nobody would ever do that.