There’s a lot buried in the multitrillion-dollar social spending package currently moving through Congress. One provision under consideration that has largely flown under the radar, is a massive tax that would increase the cost of everyday household goods by over 25% and threaten tens of thousands of manufacturing jobs across America.
In the scramble to find “revenue raisers,” the REDUCE Act – introduced earlier this year by Senator Sheldon Whitehouse (D-RI) – is now under serious consideration for inclusion in the “fast-track” reconciliation package. It would impose a massive 20 cent per pound tax on virgin plastic resin.
Let me rename the “REDUCE Act” to the “Plastic Tax.”
And what, exactly, is the Plastic Tax? On its face, it incentivizes the use of recycled plastics, which is laudable and a goal the plastics industry wholeheartedly supports. For decades, the plastics industry has invested and continues to invest billions of dollars into new and varied recycling technologies and programs at home and abroad. Our industry is constantly innovating to increase the viability of recycling plastics and using recycled plastics in more and more products. This is quite apparent by the expressed goals of the leading consumer brands to incorporate a significant amount of recycled plastic into their products.
Unfortunately, the Plastic Tax is by its nature regressive and would be a gut punch to working-class families across the country trying to make ends meet. American households have seen their grocery bills skyrocket in recent months due to record levels of inflation not experienced in decades. The addition of the Plastic Tax would add insult to injury for families just trying to get by because a significant amount of the basic products they purchase at the grocery store would be impacted by this punitive tax.
What are some of the items that ultimately would be hit by the Plastic Tax? Everything from personal care products like shampoo and conditioner bottles, deodorant containers, contact lens solution bottles, and many other cosmetic products. There are also condiments including ketchup and mustard, salad dressing, spices, snacks, packaged meats and produce. That’s just to name a few.
It wasn’t until after the tax proposal had been introduced that representatives of the plastics industry were even invited to discuss the ramifications of the Plastic Tax. Despite some great bi-partisan successes on our issues in the last Congress, we must question why our industry is now being singled out through punitive legislation. Solid waste and recycling is an issue for all industries.
The fact remains, a recycling system is only as strong as its inputs and capacity to process those inputs. One of the biggest problems with the Plastic Tax is that there simply isn’t enough supply of recycled plastic available to meet even current demand, let alone once the tax kicks in. This is because there is not sufficient recycling infrastructure. That would make the Plastic Tax simply unavoidable and felt by tens of thousands of workers in the plastic supply chain down to consumers of common everyday products.
Despite the costs, could the Plastic Tax at least achieve environmental goals? No. It’s highly likely consumers will be forced to use alternative materials due to increased plastic costs. Before passing a proposal like this, I strongly urge the consideration of the unintended environmental consequences.
Replacing plastic with paper, glass, and metal would deplete more resources and emit more carbon emissions. For example, a British study found that replacing all plastic water bottles used globally with glass would increase emissions equivalent to adding 22 coal-fired power plants. And that is just one product. Additionally, a Danish study found an organic cotton tote bag needs to be used 20,000 times to offset its overall impact on production. That equates to daily use for 54 years for a single bag.
The Plastic Tax has an expansive economic and environmental scope that would affect every American in both the short and long term. At the very least it deserves an open discussion involving lawmakers, environmental groups, and industry stakeholders. Unfortunately, that has not occurred. There hasn’t been a single hearing. There hasn’t been a single witness called. There has been no oversight by Members of Congress whose constituents could be devastated by the size and scope of this proposal.
The massive Plastic Tax is clearly not ready for prime time.
About the Author:
Tony Radoszewski is president and CEO of the Plastics Industry Association (PLASTICS) and has over 40 years of experience within the plastics industry.
