Report: DC’s Bag Tax Kills Jobs

Published February 21, 2011

A new report finds the bag tax Washingtonians have been paying for more than a year now to be a job killer and economic loser. The study, commissioned by Americans for Tax Reform and conducted by the Beacon Hill Institute, examines the economic fallout of the DC bag tax.

One of the more annoying taxes ever devised, the levy covers even those little plastic bags that Subway sandwich shops put your foot-long in. Macy’s has to charge a bag tax with all purchases storewide because it sells Godiva chocolates.

According to the report, 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 of Columbia and, as a result of the bag tax, DC will needlessly forgo an additional $108,340 in sales tax revenue and see investment drop by $602,000, with the bulk of the loss occurring in the retail sector.

Poorest Hit Hardest
The report’s findings underscore that the bag tax takes its greatest toll on the District’s poorest residents and communities.

Unlike many bag tax supporters, DC’s poor and elderly who rely on public transportation aren’t likely to have a Subaru Outback or Volvo station wagon in which to keep all of their Life is Good canvas bags handy. And despite the green auspices under which bag taxes and bans are sold, it has yet to be demonstrated that they produce any measurable environmental benefit.

As it stands, the environmental impact wrought by plastic bag taxes and bans is equivalent to the ratio of unicorns to leprechauns in the District—zero. Litter audits conducted before and after San Francisco’s first-in-the-nation bag ban found plastic bags were not a significant source of litter to begin with and actually ended up constituting a greater share of total litter after the ban.

The report crystallizes the dubious economic impact of the bag tax, but bag taxes and bans have other unintended consequences, some of which even pose public health risks.

Health Risks of Reusable Bags
Scientific testing of reusable shopping bags found they are often used for multiple purposes and “seldom if ever washed,” making them a Petri dish for bacteria and cross-contamination. Researchers discovered large quantities of bacteria “in almost all bags and coliform bacteria in half.”

Who’s hungry now? I know I am.

The health concerns don’t end there. A Tampa Tribune investigation in November found certain types of reusable bags sold at Publix and Winn-Dixie stores contained levels of lead that health officials deemed a cause for concern.

The issue has even drawn the attention of Congress. Sen. Chuck Schumer (D-NY) recently called on the Food and Drug Administration, the Environmental Protection Agency, and Consumer Product Safety Commission to investigate the matter.

“When our families go to the grocery store looking for safe and healthy foods to feed their kids, the last thing they should have to worry about are toxic bags,” said Schumer.

Ongoing Tax Campaign
Despite evidence that bag taxes and bans are detrimental to the economy and do not improve the environment, anti-plastic zealots continue an aggressive, well-funded lobbying campaign in state capitols and city halls across the country.

The Oregon Senate is considering a bill that would impose the first statewide bag prohibition in the nation. Although a bag tax or ban may not have been proposed in your neck of the woods, don’t worry; chances are it will be in the near future.

This new report on DC’s experience with its bag tax should serve as a cautionary tale.

Patrick Gleason ([email protected]) is director of state affairs at Americans for Tax Reform. Used with permission from the Washington Examiner, where a version of this article first appeared.

Internet Info

“The Impact of Bill 18-150 on the Economy of Washington, D.C.,” the Beacon Hill Institute at Suffolk University: