Friday, September 24, 2010

Bag Tax Successful Thus Far

Photo, courtesy of Good.Is

The Wall Street Journal reports that DC's plastic bag tax, which places a 5-cent surcharge per plastic bag used by shoppers, has been an overall successful endeavor.

When the tax was initially introduced to a grumbling public, opponents cited it as another example of government interfering with free market economics. Personally, I disagreed...I hoped that the bag tax would help mitigate pollution from plastic bags by encouraging, but not requiring different consumer behavior. According to the Washington Post, almost half the trash in the Anacostia River tributaries is plastic shopping bags.
However well-intentioned the tax seemed though, I honestly did not anticipate it's success. As Matthew Yglesias pointed out, people tend to be wedded to their habits, adding the (intentionally) humorous comment that many view plastic bags as an intrinsic right, like guns and religion. What concerned me more was that a mere 5-cent tax might not be enough to entice consumers to make the extra effort to replace disposable bags with canvas.

However, I'm glad to see that my expectations were wrong! Recent data shows that the tax was successful in altering consumer behavior.

As WSJ reports (by way of Good Is), DC consumers used about 270 million plastic bags last year. Since the implementation of the bag tax, that number has been reduced by 60 percent. Good Is was an early supporter of the tax, but other sources (such as The New Republic) cite similar findings.

Photo: Justin Sullivan/Getty Images
So back to my previous concern--will a 5-cent bag tax truly incentivize people to make the extra effort to buy, store and carry canvas bags? As The New Republic indicates, even a small incidental tax on an item like plastic bags can change the way people think about them. TNR further compares DC's revised consumer mindset to Thomas Friedman's conclusions about cap-and-trade. In fact, a smaller tax may actually be more successful and more politically palatable (as compared to Seattle's failed attempt to instigate a 20-cent bag tax).

It still remains to be seen whether, in the long term, a bag tax will harm jobs in the plastics industry as some critics have asserted. But for now, I think we can hail DC's bag tax as a success!

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