A BAG IDEA: D.C.'S NEWEST TAX HURTS BUSINESSES, CONSUMERS

March 8, 2010

D.C. lawmakers tried to sugarcoat the 5 cent per bag tax on store bought items, calling it a fee rather than a tax.  The tax has been in effect in the District of Columbia since New Year's Day.  Stories in the Washington Post, the Wall Street Journal, and other media have reported of widespread disaffection with the tax among people in D.C.  The lawmakers behind the tax surely do not understand economics. Furthermore, the legalese used to draft the law would provoke laughter if it was not so deserving of condemnation, says the Heritage Foundation. 

  • Consumers must pay five cents per bag on any item bought in a store that sells food.
  • For the infraction of stepping foot in our nation's capital, and having the gall to buy something, you must pay to clean up the Anacostia River.
  • Furthermore business owners are prohibited by law from paying the tax for you.  

The problems with this tax are many, says Heritage: 

  • People are shopping in Virginia and Maryland for their groceries instead of D.C. and are being inconvenienced.
  • Small, irrational taxes such as this one often start small, but grow larger and are never retired; for example, if history is any indication, this tax would not disappear even if the Anacostia River was to become a pristine nature preserve.
  • Many stores sell a small amount of food but mostly non-food items; they are being forced to end the food side of their enterprise, or hurt their business; this is an affront to their freedom to transact as they choose. 

The biggest losers because of the tax, if not the business owners who may have to close up shop, are the poorer residents of D.C.   To them the dollars they spend on grocery bags that used to be free really add up.  It is not they, after all, who polluted the river, says Heritage. 

If people want to clean the river, let them start their own nonprofit organization and get those who believe in the cause to go at it, or try to find the real polluters of the stream who are not local grocers or people without automobiles, says Heritage. 

Source:  Patrick Tyrrell, "A Bag Idea: D.C.'s Newest Tax Hurts Businesses, Consumers," Heritage Foundation, March 5, 2010. 

For text:

http://blog.heritage.org/2010/03/05/a-bag-idea-dc%E2%80%99s-newest-tax-hurts-businesses-consumers/ 

 

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