On April 17th Taxpayers Will Pay To Clean Up After Polluters At Toxic Wastes Sites

Executive Summary

To address the public health threats created by toxic waste sites, Congress established the nation’s premier toxic cleanup program, the Superfund, in 1980. Congress designed a funding structure for Superfund that placed the financial burden of cleaning up toxic contamination on the polluters by collecting three established fees from polluting industries. Collectively, the three fees, known as the Superfund “polluter pays” fees, relieved regular taxpayers from paying for toxic cleanups by compelling polluting industries to take financial responsibility for cleaning up toxic waste sites.

In 1995, Superfund’s polluter pays fees expired. Since then, the financial burden to clean up toxic waste has shifted entirely from polluters to regular taxpayers. Taxpayers now pay for all Superfund-led toxic cleanups, spending well over $1 billion annually to protect public health from the irresponsible business practices of polluting industries. As valuable public dollars are spent on these cleanups (see table below), polluting industries are enjoying a $4 million per day tax break courtesy of the American taxpayer. In order to shift the financial burden of toxic waste cleanups from taxpayers back on to polluters, Congress must act the reinstate Superfund’s polluter pays fees.

Cost to Taxpayers to Finance Superfund Cleanups in the Absence of Polluter Pays Fees*

*Methodology for Generating Taxpayer Data
The above data table breaks down the amount of taxpayer dollars from each state going to clean up toxic waste sites. The cost to state taxpayers was derived by multiplying the percentage a state pays into the U.S. Treasury in income taxes (IRS 2004) by the amount of money appropriated from general revenues into the Superfund program in the given fiscal year. For example, in 1995, when adjusted to 2004 dollars, the Superfund program received $310 million from general revenues. Wisconsin’s contribution to the U.S. Treasury accounted for 1.7% of total income taxes. Thus the cost of the Superfund program for Wisconsin taxpayers in 1995 was $5,374,065. This formula was repeated for each state and the District of Columbia. The numbers incorporate the most recent available tax data from 2004 filings, and assume that the percentage of income tax paid by each state was the same in 2004 as in 1995.

Polluter Pays Fees
Reinstating Superfund’s polluter pays fees will shift the financial burden for cleaning up toxic pollution from American taxpayers back on to the industries associated with contamination at the nation’s worst toxic waste sites. The three polluter pays fees, now expired, include:

• Crude Oil Tax: The oil industry is one of the most polluting industries on the planet. Each year, at least 14,000 oil spills occur in the United States. Congress originally put a 9.7-cent per barrel tax on the purchase of crude oil by refineries and other industries. In a political compromise, Congress eliminated most Superfund liability for oil spills. Since the fees expired, oil companies have enjoyed a tax holiday and liability exemptions for the toxic contamination they cause.

• Chemical Feedstock Tax: Congress assessed a fee on the purchase of 42 toxic chemicals associated with dangerous substances at Superfund sites. The amount of tax ranged from $0.22 to $4.87 per ton, except xylene, which was taxed at $10.13 per ton. Also, the tax exempted certain chemicals when used for certain purposes (e.g. methane and butane when used for fuel) or when produced in certain ways (e.g. any listed chemicals derived from coal).

• Corporate Environmental Income Tax: Congress collected taxes on the profits of large corporations at a rate of 0.12 percent on taxable profits in excess of $2,000,000. Corporations in the manufacturing industrial sector (e.g. chemical and allied products, petroleum and coal products, electrical and electronic equipment) and mining sectors paid about 41 percent of this tax; these sectors are responsible for about 43 percent of all Superfund sites. Financial institutions, insurance, and real estate corporations accounted for almost 30 percent of the tax, with large corporations in the utility and other sectors making up the remainder.