According to the company’s website press release on April 18, 2023, U.S. Sens. Ted Cruz (R-Texas), John Kennedy (R-La.), Mike Lee (R-Utah), and John Barrasso (R-Wy.) reintroduced the Chemical Tax Repeal Act to eliminate the Superfund Tax imposed by the Infrastructure Investment and Jobs Act. Sen. Cruz previously introduced this bill in 2021.
The 2021 infrastructure law imposed roughly $15 billion worth of taxes on 42 different chemicals, critical minerals, and metallic elements that are the building blocks of common household items such as plastics, rubber, concrete, soap, lightbulbs, and electronics. Texas is home to forty percent of the country’s chemical manufacturing plants, and would be heavily impacted by this tax.
Upon reintroduction, Sen. Cruz said:
“Inflation has skyrocketed under President Biden, and his Chemical Tax would only make things worse. This tax increases prices on Texas and American manufacturers, driving up the prices of everyday household items that families need. Repealing this tax would benefit those most harmed by Washington’s out-of-control, inflation-driving spending: American families and those on a fixed income.”
Deputy Director of the consumer advocacy group Consumer Choice Center, Yaël Ossowski, said:
“In a time of persistent inflation and escalating trade wars, we must do everything we can to ease imposed burdens and costs on consumers. Repealing taxes on necessary chemicals and components — all pivotal to American manufacturing, domestic production, and increased competition — is a great measure that will go a long way in making lives for consumers just that much easier. We praise any efforts that help make products and services more affordable for American families.”
President of the National Taxpayers Union, Pete Sepp, said:
“The chemical excise tax enacted in 2021 has all the hallmarks of bad policy -- a punitive rate, levied on critical materials to the economy, which is difficult to administer and will be hidden in the price of numerous goods that consumers and small businesses depend on every day. Taxpayers are grateful to Senator Cruz for keeping up the fight to repeal this destructive tax and protect American families' already fragile finances.”
President of the Taxpayers Protection Alliance, David Williams, said:
“TPA applauds Sen. Ted Cruz (R-Texas) for offering legislation to repeal the Superfund excise tax. The Superfund excise tax was originally created in the 1980’s and since its re-implementation as part of the Infrastructure Investment and Jobs Act (IIJA) in 2021, has needlessly pulled more than $1.2 billion annually away from American employers, individuals, and consumers. As with any tax, the added costs of doing business means higher prices and lower productivity. TPA thanks Sen. Cruz for proposing this commonsense solution to protect hardworking Americans and lower costs for businesses and consumers.”
BACKGROUND
The Chemical Tax, also known as the Superfund Tax, existed from 1987-1995, and was used to mitigate certain contaminated sites around the country with mixed success and high costs. The 2021 infrastructure law re-imposed the tax at twice its prior levels. Because it is an excise tax, it is simply passed down the supply chain, raising process for many common items.
The Joint Committee on Taxation estimate the tax will cost Americans $1.45 billion annually for ten years.
The tax is used to pay for cleanup for sites on EPA’s Superfund list where there is no longer a responsible party to pay to clean up the site. In a recent budget committee hearing EPA Administrator Regan testified that the EPA’s administrative cost was 27% for many of their programs, which is why programs like these are best left to state agencies.
Another side effect of the tax is that is increases costs of producing items in the U.S. which uses these chemicals, giving an advantage to foreign manufacturers and harming American companies and workers.
Groups against the Superfund Tax include the National Taxpayers Union, Americans for Prosperity, Americans for Tax Reform, the Council for Citizens Against Government Waste, Freedom Works, and the Taxpayers Protection Alliance.
