In a recent interview with Harvard Business Review, Harvard Business School’s Mihir Desai and Bill George gave some great insight on inversions, who really pays the corporate tax, profit shifting, and corporate tax...
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- D.C. Bag Tax Leads to Fewer Bags, or Not?
D.C. Bag Tax Leads to Fewer Bags, or Not?
Since January 1, 2010, asking for a plastic bag in a D.C. store will cost you 5 cents. Environmental officials surveyed 600 D.C. residents and 177 D.C. businesses last year and concluded that plastic bag usage has dropped 60 percent since the tax went into effect.
Mike DeBonis of the Washington Post notes, however, that bag tax collections are steady. If bag usage is down 60 percent, why is the city pulling a consistent $150,000 to $200,000 a month?
Yesim Yilmaz, chief of revenue estimation for the District’s Office of the Chief Financial Officer, said the revenue trend was a surprise.
“When we forecasted the bag fee collections back in , at the time the city adopted the fee, we had expected that these collections would decline over time,” she said. “But they did not.”
According to the original estimates, the city was expected to collect $1.05 million in fiscal 2013, which ended Sept. 30. Instead, it collected in excess of $2 million.
Brian Van Wye, who manages stormwater programs for the Environment Department, said several factors could explain why bag tax revenue has been stable while residents report using fewer bags, including the District’s recent population growth and the openings of several new grocery stores. He also credited increased city outreach and enforcement of the bag-tax, causing more businesses to remit bag-tax revenue that has been used to clean and restore waterways.
DeBonis acknowledges these arguments, but also suggests that the survey data may have been unreliable because it relied on respondents' estimates of pre-tax bag usage.
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