The US Senate proposed a list of tax increases that could be enacted to pay for the 3.5 trillion USD Budget Reconciliation Bill proposed by President Joe Biden.
One of the tax increases generating much debate is the federal excise tax on virgin plastics which are plastics that are not reprocessed nor recovered. The tax would be at a rate of 0.20 USD per pound of virgin plastics used to make single-use plastics products.
A similar tax proposal, the REDUCE (Rewarding Efforts to Decrease Un-recycled Contaminants in Ecosystems) Act, was introduced earlier this year also aims at levying an excise tax of 0.20 USD per pound on virgin plastics in single-use products. Taxes collected under the REDUCE Act would then go to a plastic waste reduction fund.
The national plastics tax proposals as such follow a regulatory regime for plastic manufacturers referred to as Extended Producer Responsibility (EPR). EPR is aimed at reducing the use of virgin plastics and generating funding for new recycling facilities.
The EPR initiative, while supported by environmental organizations, is also criticized for imposing a regressive tax increase that will eventually harm low-income households the most. It is estimated that EPR could raise the cost of consumer goods in a state like Maine from 99 million USD to 134 million USD annually, and monthly costs for a family of four between 32 USD and 59 USD respectively.