Last week, I visited my favourite Loblaws supermarket in Toronto and
found myself greeted by a message that since the “success” of the 5¢
plastic bag tax, which was repealed in Toronto on July 1, “speaks for
itself,” the company was going to keep charging it.
It is a truism of fiscal history that “temporary” taxes never get repealed. However, taxation has surely entered a whole new era when a government removes it, but corporations decide to keep it on as a matter of “corporate social responsibility,” “sustainability” and saving the planet.
Loblaws is not the only retailer that has decided to go into the business of government by taxing its customers and redistributing the proceeds. Sobey’s, Metro and Shoppers Drug Mart are among those who have also decided they should usurp the function of government and direct (some) of the proceeds to “good causes.”
But let’s start with the notion that the reduction in the use of bags is a “success” and “speaks for itself.”
Nothing “speaks for itself.” All information has to be framed and analyzed. The “success” of plastic bag reduction has been achieved at the cost of consumers’ convenience. In a number of stores, Loblaws doesn’t provide bags at all.
An economist might rightly point out that it is market-distorting to supply goods for free, because this will lead to excess demand. We might be left with a tragedy of the plastic bag commons. However, this is not the case because demand for plastic bags at checkouts is a form of “derived demand” — that is, it is based on the volume of groceries, which are certainly not free.
Read more: http://opinion.financialpost.com/2012/08/10/peter-foster-private-plastic-checkout-tax/
It is a truism of fiscal history that “temporary” taxes never get repealed. However, taxation has surely entered a whole new era when a government removes it, but corporations decide to keep it on as a matter of “corporate social responsibility,” “sustainability” and saving the planet.
Loblaws is not the only retailer that has decided to go into the business of government by taxing its customers and redistributing the proceeds. Sobey’s, Metro and Shoppers Drug Mart are among those who have also decided they should usurp the function of government and direct (some) of the proceeds to “good causes.”
But let’s start with the notion that the reduction in the use of bags is a “success” and “speaks for itself.”
Nothing “speaks for itself.” All information has to be framed and analyzed. The “success” of plastic bag reduction has been achieved at the cost of consumers’ convenience. In a number of stores, Loblaws doesn’t provide bags at all.
An economist might rightly point out that it is market-distorting to supply goods for free, because this will lead to excess demand. We might be left with a tragedy of the plastic bag commons. However, this is not the case because demand for plastic bags at checkouts is a form of “derived demand” — that is, it is based on the volume of groceries, which are certainly not free.
Read more: http://opinion.financialpost.com/2012/08/10/peter-foster-private-plastic-checkout-tax/
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