Infrastructure Bill Contains $14.5 Billion Superfund Tax Hike, Hits Critical Minerals

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Posted by Jack Fencl on Wednesday, August 4th, 2021, 1:32 PM PERMALINK

The $1.2 trillion infrastructure bill making its way through the Senate contains a $14.55 billion tax hike on American chemical and mineral producers.

Section 80201 of the bill would revive long-expired Superfund excise taxes at twice their previous level. This direct tax hike on American producers would result in higher prices for consumers, threaten thousands of jobs, and undermine domestic critical mineral development.

Senator Ted Cruz (R-Texas) has introduced an amendment (#2388) that would strike the inclusion of the Superfund Excise Tax from the bill. Americans for Tax Reform supports the Cruz amendment and urges lawmakers to vote in favor of the amendment. 

The Superfund taxes were last in effect in the mid-1990s, when Congress allowed them to expire on the grounds that they were burdensome and unnecessary. Despite being sold as a "user-fee" to fund the Hazardous Substance Superfund, only $3.5 billion of $14.55 billion of new revenue projected by the Joint Committee on Taxation is authorized for the Superfund. 

Critical Minerals are hit by the tax

The tax would apply to a list of 42 chemicals and minerals. Four of these substances—Arsenic, Antimony, Chromium, and Cobalt—are listed as “critical minerals” by the Department of Interior, which means they are “essential to the economic and national security of the United States” and have supply chains that are “vulnerable to disruption.” 

Increasing taxes on critical minerals contradicts the stated goals of lawmakers seeking to ramp up our domestic critical mineral supply chain. It makes little sense to impose harsh tax hikes on these vital resources, especially at a time when policymakers are growing increasingly concerned about the potential for countries like China to cause problems for American supply chains. 

Coalition of taxpayer groups opposes the Superfund Excise Tax

A coalition of taxpayer advocacy organizations, including Americans for Tax Reform, wrote a letter in July expressing concern about the implications of reimposing the Superfund excise taxes: “A tax increase on job creators, individuals, or consumers is always a precarious endeavor, but in the midst of a recovery from a downturn precipitated by the response to the pandemic could threaten our economic vitality in the years to come.”

Threatens 7,500 Jobs

An economic analysis by the American Chemistry Council found that nearly 7,500 jobs would be at risk if the tax increase were passed. Moreover, 44 plants that produce critical chemicals, minerals, and metals could potentially be forced to shut down.

The following chemicals and minerals would be subject to Superfund excise taxes:

Substance

 Tax per ton 

Acetylene

$9.74 

Benzene

$9.74 

Butane

$9.74 

Butylene

$9.74 

Butadiene

$9.74 

Ethylene

$9.74 

Methane

$6.88 

Napthalene

$9.74 

Propylene

$9.74 

Toluene

$9.74 

Xylene

$9.74 

Ammonia

$5.28

Antimony

$8.90

Antimony trioxide

$7.50 

Arsenic

$8.90 

Arsenic trioxide

$6.82

Barium sulfide

$4.60 

Bromine

$8.90 

Cadmium

$8.90 

Chlorine

$5.40 

Chromium

$8.90 

Chromite

$3.04

Potassium dichromate

$3.38 

Sodium dichromate

$3.74 

Cobalt

$8.90

Cupric sulfate

$3.74 

Cupric oxide

$7.18

Cuprous oxide

$7.94

Hydrochloric acid

$0.58 

Hydrogen fluoride

$8.46

Lead oxide

$8.28

Mercury

$8.90

Nickel

$8.90 

Phosphorus

$8.90 

Stannous chloride

$5.70

Stannic chloride 

$4.24 

Zinc chloride

$4.44 

Zinc sulfate

$3.80 

Potassium hydroxide 

$0.44 

Sodium hydroxide

$0.56

Sulfuric acid

$0.52 

Nitric acid

$0.48

 

Lawmakers should put American consumers first and remove this tax increase from the bipartisan infrastructure package.  

Photo Credit: Meetthemets18

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