tax policy center
Tax Topics

Tax Topics

2009 Tax Stimulus
2012 Election Tax Plans
2015 Budget
Alternative Minimum Tax (AMT)
American Jobs Act of 2011
Brief Description of the Model 2013
Camp Tax Reform Plan
Current-Law Distribution of Taxes
Deficit Reduction Proposals
Distribution of the 2001 - 2008 Tax Cuts
Earned Income Tax Credit
Economic Stimulus
Education Tax Incentives
Estate and Gift Taxes
Expiration of the Bush Tax Cuts
Explanation of Income Measures 2013
Federal Budget
Fiscal Cliff
Fiscal Crisis
Flow-Through-Enterprises
Guide to TPC Tables
Health Insurance Tax Incentives
Homeownership
How to Interpret Distribution Tables 2013
Marriage Penalties
Model FAQ 2013
Model Related Resources and FAQs
Payroll Taxes
Presidential Transition - 2009
Recent Tax Stimulus Legislation
Retirement Saving
Tax Encyclopedia Index
Tax Expenditures
Tax Reform Proposals
Value-Added Tax (VAT)
Who Doesn't Pay Federal Taxes?
Working Families

E-mail Newsletter

Enter your e-mail address to receive periodic updates on TPC publications and events.

> newsletter archive

tax topics
 

Budget Header 2011

  Return to Previous Budget Provision                                  Go to Next Budget Provision   
  

Reinstate Superfund Taxes

The Superfund trust fund is used to clean up contaminated sites. Parties found liable for contaminating the sites generally bear the cost of Superfund cleanups. The Superfund trust fund covers the costs when liable parties no longer exist or either cannot or will not undertake a cleanup.

The Superfund program receives funding from two annual appropriations: general funds from the Treasury and balances in the Superfund trust fund. In earlier years, revenues for the trust fund came from three dedicated excise taxes (on petroleum, chemical feedstocks, and imported substances using hazardous chemicals subject to excise taxes) and an environmental corporate income tax. Those taxes expired in December 1995, however, and the amount of unobligated money in the fund gradually declined to zero by the end of fiscal year 2003. The Superfund trust fund has been funded almost entirely through general revenues ever since.

When they expired at the end of 1995, Superfund taxes included 1) an excise tax of 9.7 cents per barrel on crude oil or refined oil products; 2) excise taxes of $0.22 to $4.87 per ton on certain hazardous chemicals; 3) an excise tax on imported substances that use one or more of the hazardous chemicals subject to excise tax in their production or manufacture and 4) an environmental income tax of 0.12 percent on the amount of a corporation’s modified alternative minimum taxable income that exceeds $2 million. The president would reinstate the three Superfund excise taxes and the corporate environmental income tax as of January 1, 2011. Under the president's proposal, these taxes would sunset after December 31, 2020.

Proponents of reinstating the Superfund taxes argue that imposing these taxes is consistent with a "polluters pay" principle: industries and companies that used hazardous substances should bear the cleanup costs. But, in all likelihood, the taxes are passed forward to consumers.  Further, the pollution in question is legacy contamination, so the incidence is unlikely to reach culpable parties. Proponents also argue that the Superfund taxes may discourage the use of toxins and, ultimately, hazardous waste. However, the taxes may distort economic behavior without giving businesses an incentive to handle hazardous wastes more carefully or avoid producing them. Taxes placed directly on waste ("waste end" taxes) would be more efficient. The corporate income tax component of the Superfund taxes is extremely complex. Firms had to compute a corporate AMT liability even if they did not pay the tax.

Additional Resources
Superfund Taxes or General Revenues: Future Funding Issues for the Superfund Program, Jonathan L. Ramseur, Mark Reisch, and James E. McCarthy, Congressional Research Service, Report RL31410, February 2008