This paper studies the power margin reduction in linear passive UHF RFID tag arrays due to proximity effects. It is shown experimentally that a 40% reduction in tag power margin occurs when two tags are placed with a separation of less than 2cm. Major causes of tag sensitivity degradation due to proximity in arrays are analyzed by experiment and simulation, including tag detuning, shadowing and re-emission cancellation. It is shown that tag detuning has a significant effect when tags are separated by less than 7mm. At larger separations in excess of 1cm, the tag shadowing effect and interactions between the backscattered waves cause more significant degradation for large tag arrays.