The environmental hysteria over using plastic bags for people’s groceries has now led to illiterate financial forecasting by governments in the form of taxes.
Many states pursued taxes on plastic bags used by consumers for their groceries. When a tax is proposed and passed, it must have a revenue forecast for what will come in. For states that are financially unstable, these forecasts can unfortunately be borrowed against. What this means is, they take projected revenue and borrow against that number, paying off the debt with actual revenue coming in. The problem with this theory is if the projected revenue does not come in, then the money to pay for what the state borrowed against comes from other revenue streams. No matter what politicians say, tax revenue is just to feed the beast of government.
Here is an example of terrible government forecasting from Connecticut:
Revenues from the 10-cent fee on plastic bags are coming in dramatically lower than anticipated as many merchants no longer offer such bags.
Legislators and Lamont assumed that the new 10-cent fee on plastic bags would generate about $27.7 million this fiscal year, but Tuesday’s report now estimates the state’s take at $7 million. That’s because — shortly after the budget’s adoption in early June — major supermarket chains like Stop & Shop and Big Y announced they would stop providing plastic bags altogether, leading many state officials to predict fee revenues would come up short.