Toronto’s new mayor, Rob Ford, is thinking about doing away with a 5 cent fee on plastic shopping bags. This was introduced in 2009 by the city’s former mayor, David Miller, as an environmental measure to discourage the use of plastic bags.
The bag fee is not a typical tax.Â The revenues generatedÂ do not go to theÂ government.Â The retailer keeps the money. Setting aside for the moment the environmental arguments pro and con, this makes theÂ bag tax hard to justify.Â
What possible grounds does the stateÂ have here to forcibly transfer resourcesÂ from one private partyÂ to another? IfÂ the public interest in a cleaner environment Â is the rationale, then the government should collect the revenues. In theory at least — to repeat, “in theory” — the government can make up for the additional revenue by reducing taxation on someÂ other environmentally neutral activity.
Â In contemplating this route, however, we’ll no longer be able to set aside the environmental policy debates surrounding the advisability of eco-taxes.Â In the meantime, Mayor Ford should go ahead and scrap the bag tax.