Senate Democrats are reportedly "seriously" considering including a tax on virgin plastic as part of their $3.5 trillion climate and health care spending plan.
But one industry group said it would add $40 billion to what consumers pay for everyday products, fueling inflation from higher plastic prices.
Senate Majority Leader Chuck Schumer, D-N.Y., told reporters on a Sept. 8 call that a plastics tax is in the mix as part of the Democrats' $3.5 trillion "Build Back Better" budget initiative.
"On the carbon and methane and plastic that you talked about, all those things are being looked at and seriously discussed," Schumer said, according to press reports.
While the details have yet to be decided and Democratic leadership offices did not comment, other documents from Senate Finance Committee Democrats suggest it could mirror a 20-cent-per-pound resin tax proposed in August by Sen. Sheldon Whitehouse, D-R.I.
A draft plan circulating in Washington from Democrats on the Finance Committee — and shared by a plastics industry group — included an excise tax on resin in single-use plastics among 25 options for financing the $3.5 trillion plan.
That plan said that Washington could "impose a $0.20-per-pound fee on the sale of virgin plastic used to make single-use plastics, which are routinely disposed of as trash or end up in marine ecosystem as marine debris."
Other revenue-raising mechanisms included carbon pricing, eliminating subsidies for fossil fuel production and raising the corporate tax rate above its current 21 percent.
The Democratic plan includes some tax cuts and additional spending in health care, child care, and climate and green programs.
It's not clear if the plastics fee will be part of any final proposal, but the comments from Schumer, the top-ranking Democrat in the Senate, are the most direct from any congressional leader that it is being considered.
The Plastics Industry Association said plastics firms want a cleaner environment and a better recycling system, but it said a resin fee is not the best way to do that.
"While it may sound small, a 20-cent-per-pound resin [fee] is a massive tax on plastic products that would kill American jobs and increase costs for consumers who can least afford it," said Matt Seaholm, vice president of government affairs at the Washington-based association. "While we understand its motivation, this proposal is absolutely the wrong approach to sustainability, and we will continue to work with Congress to promote positive solutions."
He pointed to what he said are billions of dollars in investments in recycling technologies and said Washington should support other legislation like the Recycle Act and the Save Our Seas 2.0 Act.
"We acknowledge that there is a global waste problem," Seaholm said in a statement.
The American Chemistry Council said the tax would raise costs of consumer goods and fuel inflation.
The group estimated that the higher plastics prices from a 20-cent-per-pound tax would add $40 billion to what consumers pay for products and also pointed to what it said were better ways to address plastic waste.
"Revenue from the tax would fund various government programs unrelated to addressing the plastic waste problem in the proposed reconciliation bill and further fuel inflation at a time when we can least afford it," said Joshua Baca, ACC's vice president of plastics.
Instead of a tax, Baca pointed to a plan ACC released in July outlining five steps Washington could take to address plastic waste, including setting up producer responsibility systems for packaging and establishing a 30 percent recycled content goal for plastics packaging by 2030.
He said the tax could incentivize a switch to other materials with a higher greenhouse gas footprint and would favor imported resins.
Whitehouse, who sits on the Senate Finance Committee, said his resin tax plan would help make recycled resin more economically competitive against virgin plastic, noting that recycled plastic accounts for just 2 percent of global plastic production.
In his proposal, the money raised would go toward building recycling infrastructure, cleaning up marine debris and initiatives to address the environmental justice and pollution impacts from plastic production.
Industry groups have been pushing other recycling legislation.
The International Bottled Water Association, for example, put out a statement Sept. 9 urging Congress to pass the Recycle Act, which provides $15 million a year for five years for consumer education. As well, it urged lawmakers to pass a $275 million funding package that is part of the Save Our Seas 2.0 Act to providing money for municipal recycling programs.