Checking Out Chicago's Checkout Bag Tax

When governments increase taxes, it's expected to happen slowly and gently enough to not be too destructive.  Chicago did not choose that path. 

John F. Di Leo | March 23, 2026

The City of Chicago instituted its Checkout Bag Tax in 2017.  When introduced, allegedly to reduce the use of grocery bags to protect the environment, the charge was seven cents per bag.  It was raised to ten cents per bag in 2025, and was most recently increased to fifteen cents per bag on Jan. 1, 2026. 

Before we look into these ideas in detail, let’s consider that history.  A decade ago, Chicago did not have a bag tax.   Then they started in 2017 with seven cents, liked it, and increased that number by 43% last year.  Then this year, they increased it by yet another 50%. 

When governments increase taxes, we expect it to happen slowly and gently enough to not be too destructive.  Chicago did not choose that path. 

Rather, Chicago chose to be as destructive as possible, more than doubling the prior levy over two short years. 

Now, what exactly do they mean by a “checkout bag?” To what does this tax apply?  The municipal code says it applies to “the retail sale or use of checkout bags in Chicago” - without many exceptions.  So that sounds like it means department stores, grocery stores, liquor stores, pharmacies, home improvement stores, bookshops, etc. - every wholesale or retail establishment that might sell goods in bags. 

The only exception written into the code is SNAP purchases.  If goods are bought with food stamps, they evade the tax.  Every other purchase is hit. 

Some may remember a time when environmentalists encouraged paper bags to discourage plastic; others remember the environmentalists encouraging plastic to discourage paper.  There’s never been agreement, or frankly, much logic, in their arguments against either, since both have their practical advantages and disadvantages, but this particular rule at least appears to be even-handed: they punish the consumer no matter which type of bag he selects. 

Some believe the tax has been a wonderful success, while others argue that it’s a failure and ought to be reconsidered.  Naturally, as with all government policy, the answer depends on what the goal was, and different people see very different things as successes. 

Before the recent increases, the program raised about $6 million per year in additional taxes for the city of Chicago (while providing a tiny hold-back of one penny per bag to each store acting as a tax collector for the process, as if that made up for the pain caused its staff). That revenue is now doubled, likely to something over $12 million/year.  

To those who value government revenue growth, this is a success.  To those who look at any other measure, it is most certainly not. 

The issue is on our minds in Illinois this year because there is a proposal in Springfield to implement such a plan statewide.  

The current proposal is for a statewide ten cent fee, increasing to 25 cents by 2030, and continuing to increase until measurable reductions in bag use are accomplished.  Some versions of the proposal would provide shopkeepers with a one or two cent holdback and/or would eventually ban the use of “single use” bags outright, either in some specific types of stores or not.  They would probably end up with two exclusions: SNAP (food stamp) purchases again, and the city of Chicago because it already has one of its own. 

The main theory is that shoppers won’t notice such a tiny charge – what’s ten or fifteen cents among friends, right? - so shoppers will gladly pay it, and perhaps some usage will drop a bit so the environmentalist lobby can claim a victory, and most importantly, the money-grubbing spenders of City Hall and the State Capitol can pull in more money. 

In reality, however, it doesn’t matter whether a shopper notices this charge or not; that charge will still have an effect on his spending, because he will have less disposable income to spend. 

If – between grocery stores and department stores, fast food and book stores – a shopper might acquire 25 bags per week (just a randomly chosen number of course; every shopper is different, every week), this totals $2.50 per week in the first year, $6.25 per week in 2030 - that’s a total cost to the shopper of $130/year for the first year, $325/year in 2030.   

Can the average Illinois shopper afford to throw away another $130/year, much less another $325/year? 

A more important question though is, can the state afford it? 

There are over twelve million people in Illinois.  Even after figuring for the exclusion of SNAP purchases, this program would still reduce the purchasing power of Illinois residents by fifty million dollars per year, much more after a few years of planned increases. 

Illinois is losing every kind of retailer at a record pace.  A crippling cost of living, insane tax burden, rampant crime and every other punishment imaginable have already stacked up the odds against any shopkeeper’s success; do we really want to make it that much harder for stores to survive here? 

Besides, when one reads up on their arguments, it is clear that the politicians are clueless about how these bags work, in practice. For example: 

Different customers need different kinds or numbers of bags.  Grocery stores are generous with bags to protect their customers.  The elderly usually want more bags, filled lighter so they can carry them easily; the young might be happy with fewer bags, but double them for strength. A new tax burden may punish these rational choices and push people into irrational choices. 

Different customers need different kinds or numbers of bags.  Grocery stores are generous with bags to protect their customers.  The elderly usually want more bags, filled lighter so they can carry them easily; the young might be happy with fewer bags, but double them for strength. A new tax burden may punish these rational choices and push people into irrational choices. 

Different products need different numbers of bags. Sharp-edged packages and heavy cans, for example, are more likely to rip a bag, so stores generously give the customer two or three bags to be safe.  They won’t want to overcharge, so a tax will encourage them to use fewer bags, causing more breakage, more spillage, more costly and messy food waste as a result, and especially, costing the shoppers more for their food budget who can least afford such a hit, while creating unnecessary tension between customer and store for not bagging the goods right. 

Different products need different numbers of bags. Sharp-edged packages and heavy cans, for example, are more likely to rip a bag, so stores generously give the customer two or three bags to be safe.  They won’t want to overcharge, so a tax will encourage them to use fewer bags, causing more breakage, more spillage, more costly and messy food waste as a result, and especially, costing the shoppers more for their food budget who can least afford such a hit, while creating unnecessary tension between customer and store for not bagging the goods right. 

The checkout bag haters derisively call them “single use bags,” apparently unaware of how real people use them in the real world. Ask a pet owner, or any parent with children, or a businessman with a home office or even a homeowner with a bathroom. Free grocery store bags see a second use as a liner for the washroom or home office wastebasket, or a second use dealing with cat litter or dog walking excursions.  Folks use these bags to save up the aluminum cans and plastic bottles for recycling. People take them along when shopping at Aldi, or at thrift stores or garage sales that don’t provide bags.  Frankly, nobody in the real world thinks of grocery bags as single-use at all.    Reducing the use of these new free bags would force people to spend more money on buying new bags themselves, which would both defeat the purpose and further hurt the public’s standard of living. 

The checkout bag haters derisively call them “single use bags,” apparently unaware of how real people use them in the real world. Ask a pet owner, or any parent with children, or a businessman with a home office or even a homeowner with a bathroom. Free grocery store bags see a second use as a liner for the washroom or home office wastebasket, or a second use dealing with cat litter or dog walking excursions.  Folks use these bags to save up the aluminum cans and plastic bottles for recycling. People take them along when shopping at Aldi, or at thrift stores or garage sales that don’t provide bags.  Frankly, nobody in the real world thinks of grocery bags as single-use at all.    Reducing the use of these new free bags would force people to spend more money on buying new bags themselves, which would both defeat the purpose and further hurt the public’s standard of living. 

Grocery stores – and medical professionals - have already seen a serious problem with the growing push for reusable customer-owned bags: customers often don’t know they need to be washed.  There’s nothing good about an environmentalist thinking he’s helping the planet by putting fresh fruit in a bag he used to transport raw chicken the week before. Brand new plastic grocery bags have been a godsend for public health. 

Grocery stores – and medical professionals - have already seen a serious problem with the growing push for reusable customer-owned bags: customers often don’t know they need to be washed.  There’s nothing good about an environmentalist thinking he’s helping the planet by putting fresh fruit in a bag he used to transport raw chicken the week before. Brand new plastic grocery bags have been a godsend for public health. 

There’s one more big problem that shows how out of touch the politicians are: people who do their own shopping know that grocery clerks have to ring up the total before everything is bagged, which means, before it’s known how many bags will be required.  This bag tax requires that they either guess at the number of bags, which will often be way off, or that they hold up the line as they wait for that final number to be known, extending the wait at every checkout line and making the jobs of cashier and bagger infinitely more unpleasant. 

There’s one more big problem that shows how out of touch the politicians are: people who do their own shopping know that grocery clerks have to ring up the total before everything is bagged, which means, before it’s known how many bags will be required.  This bag tax requires that they either guess at the number of bags, which will often be way off, or that they hold up the line as they wait for that final number to be known, extending the wait at every checkout line and making the jobs of cashier and bagger infinitely more unpleasant. 

Need we go on?  The checkout bag tax is a cash grab, destructive to the business community and the individual shopper alike, with both visible and hidden costs that neither Illinois nor any other state can afford. 

So of course the Democrats in Springfield love it. 

John F. Di Leo is a Chicagoland-based international transportation manager, trade compliance trainer, consultant and public speaker. Read his book on the surprisingly numerous varieties of vote fraud (The Tales of Little Pavel), his biting political satires on the Biden-Harris years (Evening Soup with Basement Joe, Volumes I, II, and III), and his collection of essays on public policy in the 2020s, Current Events and the Issues of Our Age, all available in eBook or paperback, exclusively on Amazon.

Image: Screenshot from Fox 32 video, via YouTube.

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