Report says bag taxes are 'disappointing'

What do taxes on plastic bags accomplish? Not much, according to the Tax Foundation, a non-profit Washington think tank. According to the group, supporters exaggerate the reductions in greenhouse gas emissions, landfill deposits and litter that bag taxes will accomplish. On top of that, the revenue that bag taxes generate for states and municipalities has been disappointing. "Even when pitched more honestly as taxes, they are likely to fall short of ambitious environmental clean-up goals. Also, bag taxes cause unintended effects, such as stimulating bulk purchases of plastic bags, perhaps of a type that would cause equal environmental damage. And bag taxes invariably get caught up in the political process in which special interests in business and government are served more than the public's interest," the group said in a report released today. "Whether assessed theoretically or practically, bag taxes are not a promising development in tax policy." The Tax Foundation said bag taxes, in theory, should fall into the category of pigouvian taxes -- named for British economist Arthur Pigou -- which are set to depress purchase of a product in order to benefit society. "Government-imposed charges for bags are best described as pigouvian taxes, though it is not clear how much environmental benefit the citizens will receive if fewer bags are used. The tendency, as in Seattle, is for public officials to greatly exaggerate environmental benefits. And with the likelihood of inter-governmental transfers, bag taxes may just be another way for a state or city to grab general revenue." Nevertheless, don't expect to see the bag tax trend go away. While mainstream environmental groups are spending more time on global warming, there are too many grassroots groups calling for bans and taxes on plastic bags than you can count -- and new efforts seemingly popping up every week. (Here's one in Austin, Texas).