Superfund Tax Revival renewing the “polluter pays” debate
One of the pay-fors of the bipartisan infrastructure deal reignites long-standing questions about who should pay to clean up some of the country’s most contaminated land.
The White House issued a frame Thursday for its $ 579 billion bipartisan infrastructure deal. In the payments for this plan, there is a line to “reinstate Superfund charges for chemicals,” a potential restoration of excise taxes that expired in the mid-1990s.
Lawmakers supporting the return of the “polluter pays” tax model, including Representative Earl Blumenauer (D-Ore.), Have applauded the provision. But industry representatives said with few details, questions remain as to whether the revenue regime should apply more broadly so that companies aren’t financially responsible for sites they wouldn’t otherwise be. liable under the Superfund Act.
American Chemistry Council President and CEO Chris Jahn said in a statement Friday that the group opposed the “ill-advised” payment, which “will only serve to damage and smother a bright spot in the US economy, the US chemicals industry, in a fragile period of economic recovery when our nation can least afford it. ”
The Superfund Act, enacted in 1980, created a federal hazardous site clean-up program. It also created a tax on the chemical and petroleum industries and gave the government broad powers to respond directly to releases or threats of releases of hazardous substances.
Blumenauer introduced separately legislation in April to reinstate charges on petrochemical companies to clean up toxic waste sites. He said he believed the effort would be successful this time around thanks to the backing of the Biden administration and broad public support.
“After hammering on this for about a dozen years, I feel really, really good,” said Blumenauer, a member of the Ways and Means Committee, on Thursday. “It’s on the right track.”
Blumenauer said it was “indefensible” not to support the re-imposition of taxes, which expired in 1995, on entities that generate hazardous waste. Letting the taxes expire was tantamount to a “jail-free exit card” for polluters, he said.
He estimated that the revenue generated from the fee reinstatement would likely amount to $ 4 billion.
An old debate renewed
However, petrochemical companies have long argued that they have stepped up efforts at sites where they have identified liability under the law. They started paying and doing the cleanup, said Steven Jawetz, Washington office manager for Beveridge & Diamond PC, whose practice focuses on Superfunds.
Imposing a “polluter pays” tax could mean that some of those taxes are paid by people who are not connected to sites, he said.
“It depends on your take on what’s right and wrong,” Jawetz said. “There is no doubt, from a social standpoint, that society needs these abandoned sites to be addressed, but why should any segment of the US industry pay for it?
Jawetz noted that the original Superfund tax regime had several components: a general corporate tax and one on the petrochemical industry. Over the years, there have been several attempts to re-authorize the tax, but they have never been successful, he said.
At the heart of the debate over funding for these hazardous waste sites are ‘orphan sites’, such as abandoned mines, where there are currently no financially viable and potentially responsible parties under the Superfund Act, according to Jawetz .
“The big question is where should this funding come from and how wide will this tax base be as possible, given that the benefits of these cleanups are spreading to everyone?” he said.
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Lawmakers on both sides of the aisle have said they need more details on the plan, which also includes $ 21 billion in funding for environmental remediation.
Rep. Paul Tonko (DN.Y.) said on Thursday he needed to study the overall costs of the package. Finding the right mix of financing mechanisms to pay for the $ 1.2 trillion infrastructure proposal is a “balancing act,” said Tonko, chairman of the energy and trade subcommittee, the environment and climate change.
Rep. Kevin Brady (R-Texas) said lawmakers only had the “big picture” of the plan and more detail is needed to assess the potential effects of reinstating the tax.
“While there was a Superfund tax that had expired, it really hits refiners, chemical manufacturers, others,” Brady told Bloomberg Tax on Thursday. “We want to better understand the impact this will have on the energy and chemical industry.”
—With help from Kaustuv Basu and Sylvia Carignan.