Despite some recent positive economic indicators, small businesses and everyday Americans are still hurting during these difficult economic times.
Washington is a city with a hard-working but struggling population. According to the U.S. Census, nearly a fifth of the city’s population lives below the poverty line. In the face of that challenge, what is the city doing to help?
One local government action that is not helping is a tax on every single bag taken from a grocery or retail store. At a time when Washington has the third-highest poverty rate in the nation, city politicians thought it fit to artificially raise residents’ grocery bills through an unnecessary tax.
As the President and CEO of the National Black Chamber of Commerce, I am dedicated to advancing the interests of Black–owned businesses. An unnecessary tax on bags at the check-out counter is damaging to all businesses and it’s especially hard on the Black community in Washington D.C.
Government’s priority needs to be economic empowerment and support for businesses and communities. City government clearly has misguided priorities if it is imposing additional costs on businesses and consumers for the sake of reducing plastic bags.
These misguided priorities are evidenced by the lack of transparency concerning the real purpose of the bag tax. Some reports have indicated that tax revenues have been directed to help prosperous District homeowners pave their driveways as part of a program to direct rain runoff.
It’s time for the city government to be honest with the city’s residents. Whenever I turn on the television, I see city-sponsored advertisements supporting the tax. Is funding for these ads – which could be used to help educate schoolchildren – also coming from this newfound tax revenue?
From a business angle, the bag tax has harmed small businesses in an already difficult economic climate. Far from helping, a Beacon Hill Institute report argues that the tax cost over one hundred jobs and reduced real disposable income by $5.64 million. In D.C.’s hardest-hit communities, every job and every dollar counts.
The Beacon Hill Institute also anticipates a rebound in the use of plastic bags, as has occurred elsewhere. As residents of Washington return to more regular bag use, the costs of the tax will rise. The study expects over 130 jobs to be lost and $5.74 million in disposable income to be lost in 2016 alone. Policy should brighten the economic outlook, not worsen it.
The bag tax also hurts consumers, particularly the city’s African-American consumers, by artificially raising the cost of grocery trips. Given that a USDA study found that fully 10% of Washington D.C.’s households are food insecure, city government policy that adds to grocery bills is not just irresponsible, it’s flat out wrong.
D.C. residents have enough burdens. Nearly half of current D.C. high school freshmen will fail to graduate. Forty-three percent of all D.C. public school children are overweight or obese, which puts the District’s children among the unhealthiest in the country. Poverty in the District is high and rising. Given the scale of the city’s challenges, this attention to our grocery bag is unacceptable.
The National Black Chamber of Commerce recognizes the need for sustainable and green economic growth. But as a champion of African-American economic rights, we cannot support Washington’s tax on plastic bags. The tax hurts businesses, consumers and may be shifting money from the underserved to the well-off. These kinds of regulations are unnecessary even in the best of economic times.