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Consumers

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Warning! This is a REALITY CHECK. Those who wish to remain in fairy tale land should stop reading now!

The facts are this, where ever you asses the e-waste fee, at the manufacturer level or at the consumer level, the consumer will pay the fee. That's it, done deal, no doubt about it. So the question becomes "Is it better for the consumer to pay e-waste fee as a separate item on the ticket, or as a part of the purchase price of the merchandise?" Let's examine both options. For that purpose let's assume a flat fee of fifty cents per consumable electronic item.

If the government charges the fee at the consumer level, the consumer pays whatever the assessed fee is at the time of purchase. If the fee is fifty cents per item, the consumer pays fifty cents per item at the time of the purchase and that's the end of that. Total cost to the consumer per item is fifty cents.

Now let's look at a fee imposed on the manufacturer. The government imposes a fee of fifty cents per item sold. The manufacturer isn't going to eat that cost. They will pass it on in the price. But there is additional paperwork involved in tracking the fee money and passing it along to old Uncle Sam. So they raise the price fifty two cents. The item is then sold to a retail outlet. Retail outlets stay in business by maintaining a profit margin. So they raise their price too. But profit margins are percentages. For simplicity let's use ten percent in this example. The retail outlet would then raise the item price by five cents. There is no fee to pay at purchase, but the total cost to the consumer just went up by fifty seven cents. That is a seven cent net loss over the consumer paid fee.

It ain't rocket science folks. The higher up the chain you impose the fee, the more it will cost at the consumer end. Think snowballs here, the higher up the hill you start rolling it, the bigger it will be at the bottom.

Learn more about this author, Rev. R. D. Brown.
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