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Proposed Seattle Bag Tax Criticized

1 min readBy: Joseph Bishop-Henchman

Seattle’s proposed “fee” on each plastic bag (actually an excise taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. , since 15 of the 20 cents is to be used for general government spending) is catching some heat for different reasons. On one hand, retailers argue that it is not neutral, since the fee only applies to grocery bags and not to other retailers who give plastic bags to customers:

“If you’re going to try to change behavior, everyone should be involved,” said Holly Chisa of the Northwest Grocery Association, a group of larger stores.

From the other direction is criticism that the bag fee amounts to a regressive tax on food:

“There’s a reason we don’t have sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. on food,” said Councilman Richard McIver. “Putting a tax on the bag — or the container I put the food into to get the food home — seems oxymoronic.”

McIver asked officials who answer to Nickels if the mayor had considered exempting food stamp customers from the fee. The mayor does not support such a move, said Dick Lilly, an analyst with Seattle Public Utilities. Nickels feels that would create a disincentive for some customers to reduce their waste, Lilly said. In addition, the mayor hopes to provide at least one free reusable a Seattle household, he has said.

More on Pigouvian taxes (taxes used to change behavior) here.