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Taxes Sought to Fix Aged Infrastructure
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By JAKE SHERMAN
WASHINGTON—A bipartisan group of lawmakers is proposing to raise about $10 billion a year to fix aging water and sewer systems by taxing the biggest users.
The legislation, which has sparked significant opposition from industry, is expected to be unveiled Wednesday at a news conference on Capitol Hill.
The bill calls for a 0.15% tax on any corporation earning a profit of more than $4 million a year. Manufacturers of any water-based beverages, excluding alcohol, would see a four-cent tax per container. Soaps, detergents, toiletries, toilet tissue, water softeners and cooking oils would face a 3% tax on wholesale prices. Pharmaceuticals would be taxed at 0.5% of the wholesale price.
Rep. Earl Blumenauer (D., Ore.), the main sponsor of the Water Protection and Reinvestment Act, said he believed the bill was necessary to repair an aging system used by all Americans. The taxes, he said, would target some of the biggest users of water and companies that have the biggest stake in the efficiency of the system. He called the fees modest and fair.
The federal government has paid an average of $2.3 billion each year since 2000 to help maintain the water system. A spokeswoman for Mr. Blumenauer said the trust fund created under the bill would bring in about $10 billion a year.
Concerns about the safety and integrity of water systems is a perennial concern, particularly in older cities. Recent water-main breaks in New York City have disrupted traffic and transit.
A U.S. Chamber of Commerce representative, Janet Kavinoky, said: "Anytime there's a broad base of general taxes being used to fund infrastructure, the chamber is going to take a close look at how that affects our members."
The chamber also has concerns that a federal subsidy for infrastructure repair could send a signal to local municipalities that they don't need to charge the real cost of providing water.
Representatives of the industries that would be hardest hit by the proposed fees said they feel unfairly targeted.
Joe Doss, president and chief executive of the International Bottled Water Association, said the proposal singled out one product category, while other water users wouldn't see tax increases.
Kevin Keane, senior vice president of the American Beverage Association, said beverage companies would almost certainly raise their prices to help compensate for the tax. This is just another example of "raising taxes on the middle class," Mr. Keane said. [It] would just add to the burden of taxpayers at a time they are already facing economic struggles," he said.
A representative from the Pharmaceutical Research and Manufacturers of America said they have not yet developed an opinion on the legislation.
Mr. Blumenauer is set to testify on the legislation Wednesday in front of a panel of the House Transportation and Infrastructure Committee.
Write to Jake Sherman at Jacob.Sherman@wsj.com
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WTF is wrong with these people? I'snt this what the stimulus bill was supposed to be for???
HOPE & CHANGE?????