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

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.

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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