Vermont’s 2020 ban on single-use plastic shopping bags, accompanied by a $0.10 fee on paper bags, was marketed as a step toward reducing environmental impact. However, the policy has resulted in several hidden costs and unintended consequences for consumers, raising important questions about the fairness and effectiveness of such measures.
A Policy Born from Good Intentions
The Single-Use Products Law aimed to curb the use of single-use plastics, a material often criticized for its environmental impact. The $0.10 fee on paper bags was designed to encourage reusable bag use while offsetting the higher cost of paper bags for retailers. But beyond the visible changes at checkout lies a complex web of financial implications for Vermonters.
Embedded Costs and Double Fees
Before the ban, the cost of plastic bags—approximately $0.01 to $0.03 per bag—was already embedded in the price of products. Consumers effectively paid for these “free” bags through higher product prices, and for taxable items, they also paid sales tax on those costs. Post-ban, these embedded costs may have not been removed from product prices. Instead, consumers now face an additional $0.10 per paper bag fee at checkout.
This means Vermonters are paying twice:
- For the pre-ban embedded cost of plastic bags that remains in product prices.
- For the explicit paper bag fees mandated by the state.
Retailers, who retain the $0.10 paper bag fee, are also beneficiaries of this setup. While not intentional, the policy allows retailers to cover paper bag costs without adjusting product prices downward, effectively creating a little financial windfall.
A Hidden Tax on Consumers
The added costs may seem small on an individual level, but they accumulate. For an average household that purchases 150 paper bags annually post-ban, the $0.10 fee translates to $15 per year. Statewide, for Vermont’s approximately 250,000 households, this amounts to $3.75 million annually in paper bag fees alone.
Further compounding this is the state’s continued collection of sales tax on the embedded costs of now-prohibited plastic bags. This adds another $0.60 annually per household and $150,000 statewide. While this might seem like a nitpicky number, it reflects a broader issue: the state is still profiting from a cost embedded in product pricing while simultaneously prohibiting consumers from receiving the product itself.
Meanwhile, the state continues to collect sales tax on these phantom costs, a form of hidden taxation on a product consumers are prohibited from receiving.
This is a technical sleight of hand with real consequences: Vermonters are paying for a product they can’t use while shouldering additional fees. Whether intentional or not, this setup raises questions about fairness and transparency in policymaking.
Reusable Bags: A Solution with Caveats
Reusable bags, often touted as the ultimate solution, bring their own challenges. These bags, especially those made from fabric, have been found to harbor germs, bacteria, and mold if not washed regularly. Studies show that most consumers do not clean their reusable bags, increasing the risk of foodborne illness and cross-contamination. Washing these bags requires water, energy, and detergent, adding both financial and environmental costs.
Reusable bags are also more expensive upfront, with costs ranging from $1 to $5 each. For low-income households, these initial costs can create an additional barrier, forcing them to rely on paper bags and pay recurring fees.
Environmental Trade-offs: Paper vs. Plastic
While plastic bags have been vilified, they are not inherently worse for the environment when used responsibly. Vermont’s own history with the “I Love Vermont” plastic bag program in the 1970s illustrates how plastic bags, used as portable trash bags, significantly reduced roadside litter. The problem isn’t the material itself but rather improper disposal.
Paper bags, on the other hand, are heavier and bulkier, requiring more energy and resources to produce and transport. They also take up more space in landfills, adding strain to waste management systems. The shift from plastic to paper often fails to consider these trade-offs, which undermine the environmental benefits of the ban.
Policy Lessons and a Call for Change
Vermont’s plastic bag ban highlights the need for a more thoughtful approach to environmental legislation. Transparency in pricing adjustments, consideration of unintended financial burdens, and acknowledgment of trade-offs between materials are essential to creating policies that are fair, effective, and equitable.
Vermonters deserve solutions that balance environmental priorities with practical and financial realities—and allow individuals the freedom to make their own choices responsibly.
Dave Soulia | FYIVT
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