U.S. Democrats introduce bill to tax ‘virgin plastic’ sales, including importsPosted on
Democrats in the House and Senate on Tuesday introduced a bill to curb plastic waste by imposing a new tax on U.S. manufacturers, producers and importers of “virgin plastic” resin destined for single-use plastics.
Sen. Shelden Whitehouse (D-OH), who sits on the Senate Finance and Environment and Public Works committees, and Rep. Lloyd Doggett (D-TX) of the House Ways & Means Committee introduced the “REDUCE Act,” which would initially add an excise tax of 10 cents per pound (eventually rising to 20 cents) to sales of virgin plastic resin used in single-use products like packaging, food and drink containers and bags, according to a Sept.19 statement from Doggett’s office.
A spokesperson in Doggett’s office told Inside U.S. Trade the tax would be applied to imported products and “any company – U.S. or foreign – would be impacted.”
Virgin plastic resin, manufactured from natural resources, has not been previously used in consumer goods, while recycled plastic resin is derived from used plastic products. Every year, each American produces around 221 kilograms of plastic waste, according to the Organization for Economic Cooperation and Development, and lawmakers are exploring ways to promote recycling and reduce plastic pollution.
“We are living with a flood of plastic pollution,” said Whitehouse, a longtime environmental advocate, in Tuesday’s statement. “A polluter fee would hold the biggest plastics companies accountable for the damage they’ve caused and increase the amount of plastic that actually gets recycled.”
Exports and recycled plastic resin would be exempt. The bill also includes several carveouts for virgin plastics used to make medical products and packaging, personal hygiene products and for use in the shipment of hazardous materials. Small businesses also would be exempt, as would importers of small amounts of plastics.
The bill is not Whitehouse’s first attempt to implement an excise tax on virgin plastic resin. In 2021, the senator introduced a similar bill that did not advance past the committee stage. Critics of that bill, including the TaxFoundation – a tax policy think tank in Washington, DC – argued that the bill’s rebate for exempted products would place new and unnecessary administrative burdens on companies.
This time, lawmakers worked with the Treasury Department and the Internal Revenue Service “to design an up-front exemption for companies that go through an annual registration process and certify that the resin they make will not be used to make single-use products,” Doggett’s spokesperson told Inside U.S. Trade, saying the approach would resemble mechanisms used in other tax systems.
“Companies that claim they don’t know or can’t certify that their resin won’t be used for single-use products would still have to pay the tax up-front and go through the rebate process,” the spokesperson added.
“We’re excited to see the feedback was taken,” said Adam Hoffer, director of excise tax policy at the TaxFoundation.
Several leading environmental groups, including Greenpeace, Oceana, the Plastic Pollution Coalition and the World Wildlife Fund, have endorsed the legislation, the Doggett statement says.