Summer infrastructure: polluters do not pay in the new “polluter pays” tax

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When the Superfund program was first adopted in Congress in 1980, one word marked the moment: justice. Finally, polluters were required to clean up neighborhoods, waterfronts and schoolyards. Many Americans living near toxic waste sites were already bogged down by health complications, including epilepsy, miscarriages, nephrosis, and even life-threatening illnesses. For once, the afflicted would benefit from those who afflicted.

But today, the Superfund program languishes. Only a small fraction of the sites identified have been successfully remediated during the 40 years of the program. This is mainly due to a lack of funds, after the expiration of a critical polluting tax more than 25 years ago.

In March, President Biden made the first substantial proposal in more than two decades to breathe new life into the Superfund program, promising to reinstate that polluter tax to fund long-awaited cleanups. But that promise failed during negotiations on the bipartisan infrastructure bill, currently being debated in the US Senate.

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The bill, known as the Infrastructure Investment and Jobs Act (IIJA), is a shell of Biden’s original climate action proposal. And the Superfund component is no exception. The bipartisan compromise removed most of the taxes that once funded the program, leaving little hope that it could regain its original strength.

According to the Environmental Protection Agency (EPA) website, there are still 1,327 federally recognized toxic waste sites awaiting cleanup. Thousands more have failed to make it through the arduous process of applying for Superfund recognition and subsequently becoming the responsibility of the EPA, as opposed to the state.

“Your taxes, my taxes, are going to pay for Exxon’s excesses.”

Where polluters can be found, provided they have not gone bankrupt or dissolved, they are the “responsible party” that must undertake the cleanup. But when there is no guilty company yet, Superfund regulators must find funding elsewhere, through other sources of funding.

The program created to fund the Superfund when there is no responsible party, known as the “polluter pays tax”, expired in 1995 under President Clinton. The tax has been the backbone of the Superfund’s resources, and since the fee expired, the EPA has relied on federal taxpayer dollars with polluting companies contributing nothing. The bipartisan IIJA allocates $ 3.5 billion to the Superfund trust to jumpstart remediation. But those funds will come from average taxpayers, not polluters, and are only a meager proportion of what is needed to clean up over a thousand sites.

The original polluter pays tax, which dates back to the creation of environmental legislation in 1980, had three components. The first was a tax on chemicals, including harmful pollutants like benzene and mercury. The second taxed oil, with a flat rate per barrel. The last part was the most substantial: a corporate income tax, known in the environmental field as a “corporate tax”. This formed the bulk of the Superfund trust.

Corporate tax imposed fees directly on businesses, charging them 0.12% of every dollar earned over $ 2 million. He deliberately avoided taxing small businesses: instead, he targeted larger businesses. But that is not part of the IIJA project. It maintains the chemical tax and tries to adjust it for inflation since 1980, but it removes both the petroleum tax and the corporate tax.

Biparty lawmakers have touted the inclusion of a “polluter pays” model. But it is misleading. Given that the original legislation was based on a considerably stronger polluter pays system, it is easy to assume that the bipartisan senators simply reinstated the old system. But a key word comes on page 2406. (Yes, the draft is a monstrous 2700 pages in all). The header claims “the extension and modification of certain Superfund excise taxes. The word “certain” indicates that part of the taxes have been left out.

Gustavo Andrade, organizing director of the Center for Environmental Health and Justice (CHEJ), suspects industry lobbyists got the better of the bipartisan group. He considers corporate tax to be the most important part of the financing system. Without it, there is little hope of cleaning up anytime soon. “How can we ‘build back better’ or build the infrastructure of the next century on foundations so saturated with toxic pollutants that they are literally killing people and giving them cancer? Andrade asked me rhetorically in a telephone interview.

The White House did not respond to the comments.

Biden is by no means the first politician to attempt to resuscitate Superfund funding. Representatives Frank Pallone (D-NJ) and Earl Blumenauer (D-OR), as well as Sens. Cory Booker (D-NJ) and Ed Markey (D-MA), all defended the Superfund program. But their plans largely failed.

“I have been working on this issue for decades, and the Senate’s inclusion of this ‘polluters pay’ provision is a promising start,” Blumenauer said in a statement. “But my Senate colleagues need to get more serious here. We cannot continue to allow polluters to pass this cost on to taxpayers. “

Environmental activists say even the part of the tax on polluters that is intact, which taxes certain toxic chemicals, does not go far enough to restore the program to its original strength. Chemicals are taxed per tonne of material, the highest rate being $ 9.74 per tonne. Senators’ calculation for the reinstatement of the chemicals tax was relatively straightforward: They have doubled the original tax rates since the passage of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) in 1980. But to accurately account for inflation, lawmakers would have needed to at least triple those rates.

Judith Enck, former EPA regional administrator under Barack Obama, said corporate tax elements should have been included in the bipartisan proposal to “speed up the cleanup process and provide the necessary jobs.” In his view, there is an economic incentive to clean up these sites, especially since the unemployment rate hovers around 6%. “The federal Superfund program needs a massive infusion of funds,” she said via email. The bipartisan plan is not enough.

When asked why she thought bipartisan legislation omitted the petroleum tax, Enck directed me to the American Petroleum Institute, the oil and gas industry’s largest lobby group. The omission of the petroleum tax and corporate tax has a reason: an exceptionally strong lobbying power. One of those senators with close ties to the oil industry is Lisa Murkowski (R-AK), one of the main architects of the bill. According to the nonprofit Open Secrets, donors affiliated with oil and gas companies were its main contributors to the campaign. Over the past five years, she has received over $ 700,000 in industry contributions.

For Andrade, the most puzzling part of the bipartisan compromise is that ordinary taxpayers – like “you and me,” he said – are the ones who are going to foot the bill for the environmental destruction of businesses. He says leaving aside corporate and oil taxes creates a “crater” in the funding of the Superfund program.

“Your taxes, my taxes, are going to pay for Exxon’s excesses,” he told me. “It’s crazy. It’s crazy. We’re basically paying the bill for cleaning up the mess these trillion-dollar companies helped create.”


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