TAX NEWS - JUNE 2010

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California Tax: Plastic grocery bag tax good for environment

Taxes, the bane of conservatives, are stagnating our economic recovery and job creation. However, despite the unpopularity of new taxes, support for a new state tax and ban on plastic grocery bags in California is imperative for the protection of our environment and for our spending.

The new law, AB 1998, encourages consumers to use reusable bags or totes to carry their groceries. Stores would be banned from providing single-use plastic bags for customers, and would be permitted to provide recycled paper bags for no less than a five cent "tax" per bag.

Many conservatives are losing sleep at the thought of another tax or a ban that affects businesses, but they don't realize the benefits of removing plastic bags. Doing so will reduce the death rates among land and marine wildlife that ingest bags.

Overflowing landfills will be more relieved  because millions of bags will not be occupying as much space. In San Diego, the Miramar Landfill is already operating on borrowed time, which was extended by similar measures in the past.

Opponents of the plastic bag ban and paper bag tax state the people of California are already overburdened and can't afford to foot the bill for an independent state agency to enforce the new law.

"If the bill is enacted as now written, it could threaten as many as 500 jobs in the Los Angeles area and amount to a $1 billion tax on consumers, who will be forced to pay for bags that grocers once gave away," Tim Shestek, a spokesman for the American Chemistry Council, said in a report from The San Diego Union-Tribune. "The bill (also) estimates a cost of $1.5 million in each of the first two years to set up and regulate the program."

Shestek assumes consumers will continue to use non-reusable bags after the tax is implemented. The purpose of a tax in this situation is to severely reduce or eliminate a negative externality — the result when a product creates a negative side effect for a third party, rather than the producer or consumer, usually the environment — in this case, the negative third effects are those of single-use bags.

After the negative externality is taxed, consumers don't continue to fuel it because it costs them more money. Shestek's argument is not economically sound.

Shestek is correct that the program will cost $3 million throughout the first two years to set up and regulate, but the state will be saving money that would otherwise be spent on plastic bag cleanup.

"California spends $25 million a year to clean up plastic bag waste, and that's on top of the $300 million that municipalities spend annually," Assemblymember Julia Brownley said. So even though the program does have up-front costs, they are insignificant in comparison to the amount of money the state and local governments will save in plastic bag cleanup every year.

Environmentalists have waged a war to pass legislation banning plastic bag use for years because of the negative environmental effects of the extraordinary number of bags.

Opponents argue only one to three percent of plastic bags pollute the environment, not a very large number at first glance. But according to the Environmental Protection Agency, somewhere between 500 billion and one trillion plastic bags are consumed worldwide. One to three percent of a number that large is as many as 30 million bags sitting in our lakes, rivers, groundwater and soil.

I urge the California State Senate to vote in favor of this tax in an effort to limit and eliminate damage to our environment and spare the pocketbooks of California taxpayers. This is a tax worthwhile, which is significantly more than I can say for any other taxes or corporate bailouts from the last two years.
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