Plastic bags: Untapped tax gold mine?

Washington, D.C., has generated more than $1 million in revenue to date from its 6-month-old tax on plastic and paper bags.

The Christian Science Monitor reports that Washington collected about $150,000 from the 5-cent-per-bag tax in January -- the first month -- and revenues have increased each subsequent month, reaching $226,000 in May.

Revenues totaled $942,000 for January through May, so they've certainly topped $1 million by now. The funds are earmarked to clean up the Anacostia River.

The headline on the Monitor's story, "Plastic bags: Untapped tax gold mine?" is sure to attract attention.

So is it a "gold mine"? Not exactly.

While nearly $1 million is not chump change, in the context of that city's $6.1 billion general fund budget, it's no windfall, either. Perhaps the more significant result of the measure is that plastic bag use decreased sevenfold in the city after its implementation. Only 3 million bags were distributed in January (the first month of the tax) compared with 22.5 million per month in 2009.

The same was true in Ireland - the only country to institute a plastic bag tax, back in 2002. Plastic bag use dropped 94 percent within weeks of its passage.

The story quotes an expert from the Tax Foundation, who says that no matter how much money the tax generates, supporters will claim it a success.

If the tax brings in a lot of money to clean up the river, supporters will applaud. If it brings in little revenue, they'll say the tax is successful because it's discouraging people from using single-use bags.

There's no mention here of the Tax Foundation's report that I previously blogged about, "Bag taxes disappointing in debut."