Detailed Source of all Revenue

DETAILED ANALYSIS OF EACH REVENUE SOURCE:

Water Based Beverages Fee

How the fee would work:

The Water Protection and Reinvestment Act would place a fee on the creation of glass, cans, plastic, and other bottles for water based drinks smaller than or equal to five gallons. Water based beverages are drinks that are water or made with a significant amount of water. This includes soda, but not juice, milk, or alcoholic beverages. The fee would be 4 cents per container sold by the manufacturer.

Tapping Into a Secure Revenue Stream:

Each year about 200 billion bottles are sold in the United States. Americans have shown how much they value bottled beverages. For example Americans will pay more for bottled beverages than gasoline. If tap water cost what even the least expensive bottled water costs, monthly water bills would be close to $9,000

Paying Their Fair Share:

Bottled beverage makers rely on safe drinking water for their products. About 40% of bottled water in the U.S. and Canada is sourced from municipal tap water. The rest is taken from groundwater and surface water. The Water Protection and Reinvestment Trust Fund would invest in clean water infrastructure to ensure that surface water quality is protected and it would invest in drinking water system that make municipal sources are clean. It is reasonable for the industry that benefits most from clean drinking water to pay a modest amount to assist in its preservation.

Environmental Impacts of Bottled Beverages:

A per-container fee would provide a reason for consumers to reduce the amount of bottled beverages they purchase. Bottled beverages cause environmental harm:

• Waste: Despite the fact that most beverage containers are recyclable, they often end up in landfills. About 215 billion plastic, glass and aluminum beverage bottles and cans were sold in the U.S. in 2006, and only 1/3rd were recycled. Without recycling, some bottles can take up to 1,000 years to biodegrade. Worse still almost 40 percent of the PET bottles that were "recycled" in the United States in 2004 were actually exported, sometimes to as far away as China.

• Energy use: The packaging of most beverages is highly energy intensive and uses enormous amounts of fossil fuels. The most commonly used plastic for making beverage bottles is polyethylene terephthalate (PET), which is made from crude oil. Americans’ demand for bottled water uses more than 17 million barrels of oil annually. Transportation is a major factor in energy use associated with bottled beverages. Annual transportation of bottled water burns 500,000 gallons of oil, or enough to power more than 80,000 homes a year.

• Water use: In addition to using water for the beverage itself, the creation of the container takes a great deal of water. According to some estimates, making a plastic bottle takes twice as much water as what actually fits inside the bottle.

• Water Quality: Health standards for tap water are higher than for bottled water. The Environmental Protection Agency regulates tap water, performing multiple public daily tests for bacteria. On the other hand bottled beverages are regulated by the Food and Drug Administration. The weaker FDA regulations, which require testing only once a week, don’t even apply to some of the bottled drinks sold in the US. A recent study by the Environmental Working Group found that 10 popular brands of bottled water contained 38 chemical pollutants altogether, with an average of 8 contaminants in each brand. More than one-third of the chemicals found in bottled water are unregulated, and in some cases, the level of chemicals exceeded safety standards.

Water Disposal Products:

How It Would Work:

This legislation would establish a fee of 3% of the wholesale price of products normal flushed and disposed of in sewer systems. This includes soaps, detergents, toiletries, toilet tissue, water softeners, and cooking oils. The fee would be assessed at the manufacturer level, so the price impacts to the consumer will be much smaller than 3%. Between manufacturing and retail sales, there are several value-adding and/or price-adding steps in the value chain.

Paying Their Fair Share:

Products such as toilet paper, detergents, and toiletries make their way into the water stream, contributing to the physical and chemical treatment burden faced by sewage treatment facilities. It makes sense for this industry, which relies entirely on our nation’s wastewater treatment facilities, to bear some of the costs of keeping it functioning. In addition to treatment issues, some of these products introduce pollutants into the waste stream. For example, some detergents contain phosphorus, a nutrient that in excessive quantities can lead to growth of algae in surface waters. The USGS has detected household chemicals found in detergents, soaps, and cosmetics in streams that received discharge from wastewater treatment plants.

Putting a small tax on these products is a fair way of raising revenue for the trust fund.

Pharmaceuticals

How It Would Work:

The legislation would place a tax of 0.5% on the wholesale price of any pharmaceutical sold. The wholesale value of pharmaceuticals in the U.S. is approximately $ 156 billion. The fee would be collected from the manufacturer or importer. If the pharmaceutical industry chose to pass this fee along to consumers, it would barely raise drug prices. The tax would increase drug prices by less than .25% or an increase of 25 cents to a $100 prescription. Pharmaceutical retail sales in the US were $314 billion in 2007, about double the wholesale price.

Environmental Impact of Pharmaceuticals:

Pharmaceutical residues found in our nation’s waterare an increasing concern for clean water utilities and public health providers. Pharmaceuticals end up in water because the human bodies can’t absorb the entire dose and because they are often not disposed of properly. High amounts of pharmaceuticals including antibiotics are used by the agriculture industry in industrial farming, much of which ends up in the water.

Drugs also create a whole host of environmental and human issues. Drugs are purposefully designed to interact with the human body at low concentrations and to elicit specific biological effects. Unintended adverse effects can also occur from interaction with people for whom the drugs were not prescribed such as when drugs given to adults are in the drinking water children also drink. This increases antibiotic resistance in bacteria from residual antibiotics and their metabolites.

Effects on aquatic life are another large problem. Exposure risks for aquatic organisms are much larger than those for humans since multiple generations of aquatic organisms live in the same untreated water for their whole lives. Synthetic hormones can act as endocrine disruptors by mimicking or blocking hormones, disrupting the body's normal functions. Many of the impacts of steroidal estrogen exposure are emerging with fish being born with both sexes or neither.

Impact of Pharmaceuticals on Water Infrastructure:

Due to the wide array of chemical structures and properties associated with drugs in the water, no one single treatment can remove them all. The pharmaceutical industry should bear some of the burden of removing these pollutants from the water. The Trust Fund Bill will finance a “drug take back” program to reduce the amount of pharmaceuticals in the water systems and will fund research into clean up strategies.

Corporate Profits

How It Would Work:

The bill will establish a “Clean Water Restoration Tax” of 0.15% on corporate profits over $4 million.

Precedent for a Broad-based Corporate Fee

This revenue source follows a similar logic to the Corporate Environmental Income Tax (CEIT), enacted as one component of funding for the Superfund Trust. That tax was intended to create the broadest possible base of corporate funding by raising funds from a wide range of companies that may have used and disposed of hazardous substances.

No Fees on Small Businesses

The tax applies only above a minimum threshold designed to exclude small businesses from taxation.

Paying Their Fair Share

The rationale for creating a similar new revenue source for the water trust fund is based on the public good nature of clean water. All American corporations benefit from clean water, so as responsible corporate citizens they should pay some of the tax. This is the argument used to finance all types of government-supplied public goods.

The Clean Water Restoration Tax ensures a broad-based corporate contribution to address environmental problems that result, in part, from general business activity.