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Polluters Don't Pay in New 'Polluter Pay' Tax

In the new bipartisan infrastructure bill, even Biden's 'climate
wins,' like the Superfund program, have been substantially watered
down.

 

A toxic waterway in Ashtabula, Ohio, in 2007. (Chris Stephens/The Plain
Dealer via AP Photo)

 

****

**** When the Superfund program first passed Congress in 1980, there
was one word that marked the moment: justice. Finally, polluters were on
the hook for cleaning up neighborhoods, waterfronts, and schoolyards.
Many Americans living near toxic waste sites were already mired with
health complications, including epilepsy, miscarriages, nephrosis, and
even fatal illnesses. For once, the afflicted would benefit from those
doing the afflicting.

But today, the Superfund program is languishing. Only a small fraction
of identified sites have been successfully remediated during the 40
years of the program. This is mainly due to a lack of funds, after a
critical polluter tax expired over 25 years ago.  

In March, President Biden made the first substantial proposal

in over two decades to breathe new air into the Superfund program,
promising to reinstate this polluter tax to fund long-awaited cleanups.
But that promise ran aground during negotiations over the bipartisan
infrastructure bill, now being debated in the U.S. Senate.

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The bill, known as the Infrastructure Investment and Jobs Act (IIJA), is
a shell of Biden's initial proposal when it comes to climate action.
And the Superfund component is no exception. The bipartisan compromise
scrapped the bulk of the taxes that once financed the program, leaving
little hope that it can return to its original strength.  

According to the website of the Environmental Protection Agency (EPA),
there are still 1,327 federally recognized toxic waste sites awaiting
cleanup. Thousands more have not made it through the arduous process of
applying for Superfund recognition and subsequently becoming the EPA's
responsibility, as opposed to the state's.

When polluters can be found-provided they haven't sunk into
bankruptcy or disbanded-they are the "responsible party" that must
undertake the cleanup. But when there is no culpable firm still kicking,
then Superfund regulators must find financing elsewhere, through other
streams of funding.

The program created to finance Superfund when there is no responsible
party, known as the "polluter pay tax," expired in 1995 under
President Clinton. The tax formed the backbone of the Superfund's
resources, and since the fees expired, the EPA has depended on federal
tax dollars, with polluting companies contributing nothing. The
bipartisan IIJA allocates $3.5 billion to the Superfund trust to
jumpstart remediation. But these funds will come from average taxpayers,
not the polluters, and is a meager proportion of what is needed to clean
up over a thousand sites.

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The original polluter pay tax, which dates back to the environmental
legislation's inception in 1980, had three parts. The first was a tax
on chemicals, including noxious pollutants like benzene and mercury. The
second taxed petroleum, with a flat rate per barrel. The final prong was
the most substantial: a tax on corporate income, known in the
environmental realm as the "corporate tax." That made up the bulk of
the Superfund trust.

The corporate tax imposed a fee on companies directly, charging them
0.12 percent of every dollar made over $2 million. It purposefully
avoided taxing small businesses: Instead, it was taking aim at the
bigger firms. But this is not part of the IIJA's draft. It keeps the
chemical tax and attempts to adjust it to account for inflation since
1980, but it nixes both the petroleum and the corporate tax.

Bipartisan legislators have touted the inclusion of a "polluter pay"
model. But that's misleading. Since the original legislation rested on
a significantly stronger polluter pay system, it's easy to assume that
the bipartisan senators simply reinstated the old system. But a key word
comes on page 2,406. (Yes, the draft is a monstrous 2,700 pages in all).
The header boasts the "extension and modification of

**certain** Superfund excise taxes." The word "certain" signals
that a chunk of taxes were left out.  

Gustavo Andrade, organizing director for the Center for Health and
Environmental Justice (CHEJ), suspects industry lobbyists got the better
of the bipartisan group. He considers the corporate tax the most
important part of the funding scheme. Without it, there's little hope
of cleanup anytime soon. "How can we 'build back better' or build
this next century's infrastructure on a foundation that is so
saturated by toxic pollutants that it's literally killing people and
giving them cancer?" Andrade rhetorically asked me in a phone
interview.

The White House did not respond for comment.

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Biden is by no means the first politician who has attempted to resurrect
Superfund funding. Reps. Frank Pallone (D-NJ) and Earl Blumenauer
(D-OR), along with Sens. Cory Booker (D-NJ) and Ed Markey (D-MA), have
all championed the Superfund program. But their schemes have 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,"
said Blumenauer in a statement. "But my Senate colleagues need to get
more serious here. We cannot continue to allow polluters to pass this
cost along to taxpayers."

Environmental activists say that even the portion of the polluter tax
that is intact, which taxes certain toxic chemicals, doesn't go far
enough to build the program back to its original strength. The chemicals
are taxed per ton of material, with $9.74 per ton being the highest
rate. The senators' calculation for reinstating the chemical tax was
relatively straightforward: They doubled the original tax rates from
when the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA) first passed in 1980. But to accurately account
for inflation, the legislators would have needed to at least triple
those rates.

Judith Enck, a former regional administrator for the EPA under Barack
Obama, says that the corporate tax elements should have been included in
the bipartisan proposal to "speed the cleanup process and provide
needed jobs." In her view, there's an economic incentive to clean up
these sites-especially as the unemployment rate hovers around 6
percent. "The federal Superfund program needs a gigantic infusion of
funding," she said over email. The bipartisan plan doesn't cut it.

When asked about why she thought the bipartisan legislation left out the
petroleum tax, Enck directed me to the American Petroleum Institute, the
oil and gas industry's largest lobbying group. The omission of the
petroleum tax and corporate tax has one reason behind it: exceptionally
strong lobbying power. Lisa Murkowski (R-AK), one of the bill's key
architects, is one such senator with deep ties to the petroleum
industry. According to the nonprofit Open Secrets
,
donors affiliated with oil and gas companies were her top campaign
contributors. In the last five years, she received over $700,000 in
contributions from the industry.

For Andrade, the most disconcerting part of the bipartisan compromise is
that regular taxpayers-like "you and me," he said-are the ones
who are going to foot the bill for companies' environmental
destruction. He says that leaving out the corporate and petroleum taxes
creates a "crater" in the Superfund program's financing.

"Your taxes, my taxes, are going to pay for Exxon's excesses," he
told me. "That's crazy. That's insane. We are essentially footing
the bill for the cleanup of the messes that these trillion-dollar
corporations helped create."

Amelia Pollard is a contributing writer at The American Prospect.

 

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