A National Plastic Tax Disproportionately Hurts the Poor | Citizens Against Government Waste

A National Plastic Tax Disproportionately Hurts the Poor

The WasteWatcher

The Build Back Better Act (BBBA), which passed the House by a narrow 220-213 vote, is now in the hands of the Senate, which will amend the bill and send it back to the House.  The timing is unclear, although Senate Majority Leader Chuck Schumer (D-N.Y.) would like to get it done before Christmas.  The BBBA has a $1.75 trillion price tag (its true cost is as much as $4.8 trillion) and it is full of massive government waste and payouts to special interests.

This bill is not only costly, but it will also dramatically stifle innovation. The BBBA has about $555 billion, or 31 percent of its cost, for draconian initiatives straight out of the Green New Deal; includes government price controls on innovative drugs; and regressive nicotine and natural gas taxes that break President Biden’s pledge to not tax people with household incomes below $400,000 and they will also disproportionately impact low income households.

The original House bill contained another regressive tax in the form of a national plastic tax.  Fortunately, those provisions were stripped from the final version that passed the House.  There would have been a tax of $.20 per pound on “virgin plastic,” which is any plastic product that was not previously recycled and is produced with oil.  This tax would have imposed an estimated $120 billion in costs to consumers by increasing the price of plastic materials by up to 26 percent.

This tax mimics Sen. Sheldon Whitehouse’s (D-R.I.) bill, S. 2645, the REDUCE Act.  S. 2645 would impose a similar $.20 per pound tax by 2025 on any virgin plastic resin and the tax would be adjusted to increase with inflation, making it permanent.

If Congress included this tax in the BBBA or in other legislation currently being considered, it would disproportionally affect the poor.  Today, 45 percent of Americans say they are suffering financial hardships due to high inflation. Burdening the American people with another tax, along with the new spending in the BBBA, will only make matters worse.

Even though the original tax in the BBBA was sold as a tax focused on sustainability, the tax on plastic would be used to fund unrelated government programs.  It would favor foreign plastic imports and unfairly punish U.S. production, meaning fewer jobs and a step backward for the U.S. economy.  The Senate should not add the plastic tax back into its version of the BBBA.

Rather than imposing a regressive tax on plastic products, Congress should adopt America’s Plastic Makers 5 fundamental principles to eliminate plastic waste and improve sustainability.  They include requiring plastic packaging to have at least 30 percent recycled plastic by 2030; increasing advanced and mechanical recycling; developing national recycling standards for plastics; reviewing greenhouse gas emissions from all materials; and increasing producer responsibility for recycling access and collection for all materials, including plastics.

A tax on plastics will increase the cost of food and everyday products, contribute to inflation, and may even increase the price for sustainable products like batteries used in electric cars. Congress must avoid passing any taxes that will result in higher prices for consumers.  Low-income earners are suffering in the Biden economy and passing a plastic tax will further exacerbate their financial problems.

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