Bag the bag tax

The (compact flourescent) lightbulb clicks on for Grant Draper at My Green Element:

Here in New York, the city council passed a bill in January that requires large stores and retail chains, such as CVS, Duane Reade, Rite-Aid, and Wal-Mart, to recycle plastic bags prominently in their establishments.  Mayor Bloomberg, in his effort to make New York the “greenest city in the U.S.,” also announced plans in November to implement a 5 cent tax on the 2.8 billion plastic bags distributed in the city annually.  He estimates this program has the potential to bring in $84 million in new revenue for the city.

This is all well and good from 30,000 feet, but if a city is considering a tax on plastic bags, it really comes down to how this money collected is going to be spent.  For example, money collected by states that have bottle deposit laws typically spent on anti-littering awareness campaigns, but rather directly into the state general fund for a number of unrelated projects. Let’s make sure that if we are going to be adding yet another tax, the monies should go towards solving the problem.

When the Navy recycling program bought things around the base with recycling money, we let sailors know their efforts paid off. I think most folks are happy to do the right thing by recycling. They're even more happy to do it when they see tangible results. So I agree with Grant on that point. 

But what money? ROTFL! You mean, like cigarette taxes paying for health care? Check this out:

When states instead have structural deficits — the inability of current revenue sources to fund the normal year-to-year growth in programs — increased cigarette taxes would add to those deficits. (pp. 3)

What's he talking about? Do the math. 

$.05 charge per bag x 2,800,000,000 trash bags  =  $140,000,000

Right away I'd be asking "hey pal, you only said we're making $84 mil. Where's the other $56,000,000?" Sucker. Bloomberg is telling you it's going to cost New Yorkers fifty-six million bucks a year for NYC's finest (unionized) waste management technicians to recycle plastic bags, watched carefully by plastic bag recycling enforcement officers cruizing your local pharmacies.

Maybe the Big Apple does net $85 mil the first year. What happens when people switch to their own bags? Ba da BING - bag money goes away. All those tourists aren't smart enough to bring their own bags, so maybe the revenue drops to half. Now Grant and his friends are paying $56 million to collect $42 million in taxes, a net loss of $12 million. That's what the "structural deficit" thing is about.

Why doesn't the bag collection cost decrease? Because collection is a sunk cost. You pay it whether you recycle one bag at every store or a hundred.

Remember also that whole point of this tax exercise is to get to zero bags. Plastic bags are eeeeeeevil. They come from oil which increases CO2. They kill wildlife and farm animals. Plastic bags live forever in landfills. And they're unsightly.

What would Jesus do? Tell Bloomberg to use the $56 million he's going to lose trying to make $85 million to give people a nickel a bag. They'll turn them in by droves. Then let companies bid for the right to collect these bags, and turn around and sell them to petrochemical companies who, in turn, would enjoy the lower cost of production for plastic bags.

Best of all, it makes everybody greener, not just New York's bureaucracy.

My sister Holly was involved in representing the grocer's perspective when Seattle imposed its 20 cent bag tax. Wonder what she thinks about all this...