Study finds bag tax ineffective

A new report finds the bag tax that Washingtonians have been paying for more than a year now to be a job killer and economic loser. The study, commissioned by Americans for Tax Reform and conducted by the Beacon Hill Institute, examines the economic fallout of the D.C. bag tax. One of the more annoying taxes ever devised, the levy covers even those little plastic bags that Subway puts your foot-long in. Macy's has to charge a bag tax with all purchases storewide for the simple reason that it sells Godiva chocolates. According to the report, the bag tax will result in the elimination of more than 100 local jobs and precipitate a $5.64 million decline in aggregate disposable income for 2011. The majority of this income would have been spent in the District and, as a result of the bag tax, D.C. will now needlessly forgo an additional $108,340 in sales tax revenue and will see investment drop by $602,000, with the bulk of the loss occurring in the retail sector. The report's findings underscore that the bag tax takes its greatest toll on the District's poorest residents and communities...more