Who Pays to Clean Up Superfund Sites, and Why the Polluter Tax Lapsed

The deadline passed quietly. On December 31, 1995, at the end of a year dominated by a budget war between a Democratic president and a newly Republican Congress, a set of federal taxes simply stopped. Nobody repealed them in a dramatic vote. They had been written with an expiration date, and Congress did not extend them. The taxes had been charged on crude oil, on a list of industrial chemicals and on large corporations' income, and for fifteen years they had poured money into a trust fund used to clean up the most dangerous toxic waste sites in America, the ones where no company could be found or made to pay. When the taxes lapsed, the fund kept spending what it had. Within a few years the balance was largely gone, and the cost of cleaning up abandoned poison fell to everyone who pays federal taxes. It stayed that way for more than a quarter of a century, until Congress brought most of the taxes back in 2021 and 2022.

In short: Superfund was built on the principle that polluters, not the public, should pay for toxic cleanups, using both lawsuits against responsible companies and dedicated taxes on the oil and chemical industries. Those taxes expired at the end of 1995, leaving general taxpayers to fund orphan cleanups until the 2021 infrastructure law revived the chemical taxes and the 2022 climate law revived the petroleum tax.

Two ways to make polluters pay

When Congress created Superfund in 1980, in the wake of the Love Canal disaster, it built two separate tools for paying for cleanup.

The first is liability. Companies tied to a contaminated site, whether they owned it, ran it, sent waste there or hauled the waste, can be ordered to clean it up or to repay the government for doing so. That liability does not depend on proving the company was negligent, and any single responsible company can be made to pay the whole cost and then seek contributions from the others. Most cleanups at Superfund sites are carried out or paid for this way, by the responsible parties, often after negotiation with the EPA.

The second tool is the trust fund. Liability only works if there is someone to hold liable. Many contaminated sites were created decades ago by companies that have since gone bankrupt, dissolved or simply vanished. Those are called orphan sites. Other cleanups need to start right away, before the lawyers have finished arguing about who owes what. For all of those, the government needs money on hand. The trust fund provided it.

The fund was paid for mainly by excise taxes on crude oil and imported petroleum products and on dozens of chemicals used to make other products. In 1986, when Congress expanded and renewed the program, it raised the fund's size substantially and added a small tax on the income of large corporations. The idea was simple and widely accepted at the time: the industries whose products and wastes created the problem should bear the cost of fixing the part that could not be pinned on any one company.

Following the money at a single site

Abstractions about trust funds and liability get clearer if you follow one hypothetical site from discovery to cleanup.

Say groundwater under a small town turns out to be contaminated with industrial solvents, traced to a factory that closed in the 1970s. State or federal investigators study the site and score it using the EPA's Hazard Ranking System, which weighs how toxic the contamination is and how likely it is to reach people through water, air or soil. If the score is high enough, the EPA proposes the site for the National Priorities List, takes public comments and then lists it. Only listed sites are eligible for long-term cleanup paid for by the trust fund.

Next comes a long study phase: what is in the ground, how far it has spread and what the options are for dealing with it. The EPA then issues a formal decision on the cleanup plan, again after public comment. Meanwhile, its lawyers look for responsible parties: the company that ran the factory, any company that bought it later, firms that sent waste there.

If they find a solvent company, the EPA usually negotiates. The result is often a court-approved settlement in which the company agrees to do the work or pay for it. If the company refuses, the agency can order it to do the cleanup, and a company that ignores such an order without good reason can be liable for penalties and up to three times the cost the government incurs doing the work itself. That threat is a large part of why so many cleanups are carried out by private parties.

If the factory's owner went bankrupt decades ago and nobody else can be tied to the site, the cleanup becomes a fund-financed one. The federal government pays most of the construction cost, and the state in which the site sits generally pays a share, typically ten percent, and takes over the long-term operation and maintenance once the cleanup is in place. That cost share is another reason the trust fund matters: when federal money is short, states and towns face pressure too.

The pieces fit together. Liability handles the sites with a solvent culprit. The fund handles the orphans and the emergencies. Take away the dedicated money for the fund, and the orphan sites, which are often in the poorest places, are the ones that wait.

Why the taxes were allowed to expire

The taxes were authorized for set periods. Congress had to act to keep them going. In 1995 it did not.

The politics of that year matter. Republicans had won control of both houses of Congress in the 1994 elections, campaigning on smaller government and lower taxes. Business groups argued that the Superfund taxes were unfair because they fell on entire industries, including companies that had never polluted any site, and that the program itself was wasteful, with too much money going to lawyers and studies rather than cleanup. Many Republicans wanted a broader overhaul of Superfund, including changes to liability, before renewing the taxes. The Clinton administration supported reinstating them. Neither side got the overhaul it wanted, and the taxes lapsed.

In the years that followed, Democratic administrations and members of Congress repeatedly proposed bringing the taxes back. They did not pass. The trust fund drew down its remaining balance, and by the early 2000s the money to keep the program running came almost entirely from annual appropriations out of general revenue.

What changed when taxpayers picked up the bill

When the source of money shifted, three things changed.

Who paid. General revenue comes from all federal taxpayers, above all from individual income taxes. Money that had come from oil and chemical producers now came from the public at large. That is the opposite of what the law's polluter-pays principle intended.

How much there was. Annual appropriations compete with every other federal priority, and Superfund's budget, adjusted for inflation, fell over time. Without a dedicated revenue stream, the program had to fight for its money every year.

How fast cleanups moved. The EPA and outside reviewers, including the Government Accountability Office, documented that the pace of completed cleanups slowed in the 2000s compared with the late 1990s, and that funding constraints delayed work at some sites that were ready to begin. Sites waited on the list for years, and the communities around them waited too.

Funding was not the only cause of the slowdown. The sites left on the list were often the hardest ones, with deep groundwater contamination or complicated mixes of waste. But the evidence that money mattered is strong, and the people who felt the delay most were the neighbours of those sites, who are disproportionately low-income and people of colour.

The fairest version of the case against the taxes

It is worth stating the opposing case at full strength, because it is not foolish.

First, an excise tax on a chemical is not paid by the company that dumped waste in 1965. It is paid by the company making that chemical today, and much of it is passed on to customers in prices. Economists generally agree that excise taxes fall partly on consumers. So the polluter-pays label is imperfect: the tax is really an industry-pays and, in part, a buyer-pays tax.

Second, companies that handle their waste responsibly pay the same tax as those that do not. That weakens the incentive the tax is supposed to create.

Third, Superfund's liability rules already make many polluters pay, often heavily, and some critics argue the litigation over those rules has been inefficient enough that pouring more money into the system rewards its waste.

Here is the answer, and it is an argument. A perfectly targeted tax would charge each company only for its own historical pollution, but that is exactly what liability tries to do, and it cannot reach the companies that no longer exist. For those orphan sites, someone has to pay. The choice is between the industries that, as a group, produced and profited from the chemicals that contaminated them, or the general public, most of whom had nothing to do with it. Charging the industry is not perfect justice. It is closer than charging a nurse in Ohio. And the claim that cleanups are inefficient is an argument for reforming how the money is spent, not for letting the bill fall on people who never sent anything to a dump.

There is also a progressive lesson in the lapse. The taxes died not because of a dramatic defeat but because their supporters did not have the votes or the urgency to renew them during a budget fight. Policies with expiration dates, from tax credits to enhanced health subsidies, are only as durable as the coalition willing to fight for them when the date comes.

How the taxes came back

The comeback, when it finally arrived, came in two steps.

The Infrastructure Investment and Jobs Act, passed with votes from both parties and signed in November 2021, reinstated the Superfund excise taxes on chemicals starting in July 2022, at roughly double the old rates, and scheduled them to run through 2031. The same law appropriated an additional $3.5 billion for Superfund cleanups, money the EPA used to start work at dozens of sites that had been waiting.

The following year, the Inflation Reduction Act, passed by Democrats alone in August 2022, reinstated the Superfund tax on crude oil and imported petroleum products, starting in 2023, at 16.4 cents per barrel and adjusted for inflation.

The corporate income tax piece was not revived, so the dedicated money now comes from the excise taxes alone, alongside whatever Congress appropriates each year. Even so, after more than twenty-five years, the program once again had dedicated revenue from the industries whose products created the problem.

The chemical taxes carry their own expiration date, the end of 2031, which means the same quiet trap is set again. Whether the next Congress or the one after it extends them is the next fight, and the industries that pay them will be lobbying long before the deadline arrives.

Why this belongs to the fight over inequality

Most of the time, debates about taxing the rich focus on income tax rates, estate taxes and capital gains. But the question of who pays for public harms is part of the same argument. When an industry's costs, whether pollution, injuries or cleanup, are shifted to the public, the profits stay private and the bills become shared. That transfer is a quiet form of inequality, and it lands hardest on the neighbourhoods closest to the sites.

The lapse also shows how much a single expiration date can do. Nobody voted in 1995 to make taxpayers fund toxic cleanups. It happened through inaction. Those who benefited from the change did not have to win an argument; they only had to wait. Their savings were measured in billions over the years. The cost to the neighbours of unfinished sites was measured in time, in years of living beside contamination that a funded program might have removed sooner.

What you can do

The polluter-pays principle needs defending at each deadline, and you can help defend it.

1. Learn which sites are near you. The polluter lookup shows EPA-regulated facilities in a ZIP code with violations and penalties, a quick way to see the industrial footprint around your home.
2. Watch the rules and the money. Federal agencies still post cleanup and hazardous-waste rules for comment. The comment page lists them by issue, with the deadlines closest at hand first and practical advice on writing a comment.
3. Ask your members of Congress about 2031. The chemical taxes expire at the end of 2031 unless Congress acts. Use the representatives tool to call or write your representative and senators, and look at their recent votes while you are there.
4. Follow the bigger fight over who pays. The taxing the rich topic page follows the debates over corporate taxes and public costs that decide whether bills like this land on industry or on everyone else.

The trust fund was created on a promise that the public would not be left holding the bill for someone else's poison. That promise lapsed once through inattention. Keeping it alive this time is a matter of paying attention before the date arrives.