Friday, November 07, 2008

Bag Tax

Kudos to New York City mayor Michael Bloomberg for proposing a 6 cent tax on each plastic bag used when shopping. Plastic bags are one of those totally worthless conveniences that have real negative damage on the environment and are easily replaced.

But as this Times article suggests, Bloomberg is wrong to assume that the bag tax will create the $16 million a year in revenue for the city he hopes for. People will quickly switch to cloth bags that they own and bring with them. This has happened in European nations with bag taxes such as Ireland.

This is the core of the problem with sin taxes. They work OK for generating revenue when the product in question is actually addictive, like cigarettes. But with easily replaced consumer items like plastic bags, most people will make a quick change. This is what we should want to happen but when such plans are sold to the politicians and the public as revenue generators, the actual reason for their existence are obscured and the cities no doubt will be disappointed.