Jim Moran has pulled his biennial Earth Day publicity stunt again, introducing a bill to impose a national tax on paper and plastic bags at restaurants and retail stores. You’re probably familiar with these taxes because they’ve been imposed in D.C. and Montgomery County, MD.
Ironically, Moran introduced the bill on the same day that three Democratic Montgomery County Council members announced they are planning to repeal the tax on bags at retail stores.
Jim Moran wants you to walk into JCPenney or Best Buy with a reusable bag, or get hit with a tax. That places a burden on the customer – 80 year old D.C. resident Rosa McNair told the Wall Street Journal as she walked out of a Target, “It’s very aggravating. What are you going to do, carry all your boxes on the bus?”
But the burdens have been greater on business owners in Montgomery County, who have run into trouble charging the tax and preventing shoplifting, which is easier with reusable bags – in fact, one councilmember has alleged that the tax creates more racial profiling against minorities shopping with reusable bags. The fear of shoplifting that comes with increased usage of reusable bags has caused some businesses to raise prices to pay for preventative measures. Montgomery County has collected more than double the amount of revenue from the five cent tax than it expected, which calls into question whether the tax actually works in reducing bag usage. Officials said bag usage would decline 60% in fiscal 2013 to 33.1 million, but in the first five months of fiscal 2013 (through January), bag usage had already reached 24.8 million.
The tax has also created all sorts of problems in D.C., where the tax applies to businesses that sell food. Politics & Prose bookstore sold one food item – mints – and had to drop the mints rather than have to tax its customers for every bag, even if they don’t buy anything remotely close to food. Chocolate Moose sells gifts, jewelry, and candy has had to impose the tax even though candy only accounts for 10%-20% of its sales. These minute details and exceptions have caused a regulatory nightmare – “The law specifically excludes bags that ‘package bulk items, such as fruit, vegetables, nuts, grains, candy, or small hardware items’, [bags that] ‘contain or wrap frozen foods, meat, or fish…flowers, potted plants, or other items where dampness may be a problem’. Other exceptions include unwrapped prepared foods and bakery goods, as well as bags provided by pharmacists to contain prescription drugs, newspaper bags, door-hanger bags and laundry dry-cleaning bags. Also tax free: ‘Bags sold in packages containing multiple bags intended for use as garbage, pet waste, or yard waste bags.’” Can you imagine the regulatory disaster on a national scale? How would the federal government enforce this on 50 states – 300 million people and millions of businesses – when governments can’t even do it at the city/county level?
When Moran introduced the bill in 2011, the Center for Consumer Freedom criticized the idea, saying polls show most Americans oppose such taxes and pointing to Ireland, where plastic bag usage actually increased 400% after they started imposing a tax. In fact, the CCF pointed out, manufacturing reusable bags creates a carbon footprint 28 times larger than the footprint required to make plastic bags.
Moran’s intentions may be good – who doesn’t want to see less plastic bag litter? But imposing a national bag tax when the effect of local bag taxes has thus far been mixed at best is simply ridiculous.