Government Bytes


Will California enact a dubious tax on grocery bags today?

by John Stephenson / /

California, which has enacted some dubious policies in the past, is on the verge of breaking new ground today. Either later today or tomorrow, the California State Senate will vote on AB 1998, a bill that would ban plastic bags outright and impose a tax on paper bags in an attempt to reduce landfill waste. If enacted, California’s ban will be the first and, to date, the only statewide ban on plastic bags in the nation. It could also result in a $1 billion tax on Californians and cost hundreds of jobs at a time when the state has the sixth-highest tax burden in the nation, unemployment is greater than 12 percent, and the deficit stands at $19 billion.

NTU and its members are strongly opposed to AB 1998. As we stated in a previous letter to the State Senate, “AB 1998 would punish all Californians for simply shopping, and would limit their options for carrying groceries home.” Also, it’s our belief that “politicians should not be in the business of making routine personal decisions for consumers, especially by dictating such choices through draconian bans and higher prices on products they deem undesirable.” While some describe plastic bags as trash, the truth is that plastic bags are a great option for consumers, offering choice and advantage in terms of volume and durability. A typical plastic bag weighs 4-5 grams, but can hold up to 17 pounds. Moreover, plastic and paper bags are dual-use products, which provide everything from extra storage in the home to material for elementary school art projects. Additionally, both paper and plastic bags are easily recycled and reused; in fact, manufacturers recycle 800 million pounds of plastic bag every year.

Plastic bag taxes are only the latest fad in questionable tax policy. Although currently fashionable among tax and spenders in Washington, D.C., Seattle, and San Francisco, grocery bag taxes and bans have dubious value as policies. The Tax Foundation reports that bag taxes, like other “sin taxes,” on tobacco and soft drinks fail to produce the promised revenues. A grocery bag tax in Washington, D.C. raised only $150,000 after four months of use, even though it was touted as the funding source for what is envisioned as a multi-million-dollar cleanup of the Anacostia River. Additionally, a study by the Northwest Economic Policy Seminar reported that a bag tax imposed by Seattle has done little to reduce landfill deposits. Seattle residents have since rejected attempts to raise the bag tax. The fact of the matter is that as the price of a good increases, consumers either buy less of the good or, more likely, seek the good from another, cheaper source. Ironically, the less costly good may be of lower quality and more damaging to the environment.

AB 1998 passed the General Assembly several weeks ago and pundits report that the bill faces a tough road ahead in the State Senate because opposition to the bill has emerged from across the state. Late last week, AB 1998’s sponsor amended the bill to make it more palpable by dropping the five cent per paper bag fee and including a provision that ensures replacement bags are made in some key lawmakers districts. But the bill to be voted on now allows stores to charge customers for the “cost of the bag,” which leaves customers on the hook for the billion-dollar tax hike. Hopefully, California’s State Senators will see through this gimmick and reject the bill outright for what it is: a burdensome regulation and tax hike. If you live in California, click here to get your Senator’s contact information. Give them a call to find out where they stand on this dubious tax policy.