Stop the Paper Industry Tax Payer Ripoff!

Posted: 27 April 2009 in Subsidies, USA

Dogwood Alliance has launched a sign on letter for US citizens to demand that Members of Congress act to stop the tax rebate payments to the paper industry.

Dogwood Alliance describes their outrage at the tax rebate:

Frustrated by the financial crisis? Outraged at the greed of the AIG bonus scandal? Well, you still won’t be prepared for the cynical and sneaky grab of taxpayer dollars now being perpetrated by the paper industry to the tune of billions of your money… all by cheating a small program designed to decrease dependence on fossil fuels and fight climate change.

US citizens can send a letter to their Congress Members from Dogwood Alliance’s website.

Meanwhile, an article on Environment & Energy’s Climate Wire (22 April 2009), titled “Congress may halt paper industry’s use of ‘black liquor’ credit” states that “Key senators are looking to revamp or repeal a tax credit they wrote to encourage alternative fuels that could unintentionally allow the paper industry to receive billions of federal dollars.” Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) says paper companies should be excluded from the tax rebate:

“Clearly the tax credit was never intended to cover what it’s being used to cover,” Bingaman said. “So I think that we need to go back and correct it. And if we extend the tax credit … we need to be sure that it’s extended in a way that doesn’t cover this kind of activity.”

Not surprisingly, the American Forest & Paper Association is in favour of keeping the massive tax funded subsidy of the paper industry. A spokesperson for AF&PA, Scott Milburn, said the Association is “working with Congress” to highlight how the industry’s renewable energy generation supports national energy goals and how changes to the law would affect the industry.

“Revoking the forest products industry’s eligibility for the alternative fuel mixture tax credit before it expires later this year, despite the industry’s efforts to comply with the rules, could have serious consequences for our companies and our nearly one million employees at a time of unprecedented economic challenges,” Milburn said.

The United Steelworkers are also in favour of the tax rebate and sent a letter to the Finance Committee, claiming that the credit is long overdue as an incentive for “the rights kind of behavior”. The letter notes that the industry has lost 250,000 workers since 2006, more than 9 percent of its work force, and 25 mills were closed down in the last two years.

“It is not an overstatement to say that this credit, in a number of cases, is the most compelling factor in decisions related to the continuing operation of a number of pulp and paper mills that support some of the best manufacturing jobs left in America,” the letter said.

The article ends with a reference to the letter sent by a group of environmental organisations to protest the tax rebate.

Meanwhile, 26 environmental groups sent a letter to Finance Committee leaders urging them to end the credit as soon as possible.

“The massive payments adversely bias the free market in an ecologically harmful way,” the letter said. “The losers include more environmentally responsible producers using recycled paper content. Such mills, which are critical to developing a green jobs economy, are being put at severe disadvantage. These billions of dollars of payments are encouraging additional emissions of greenhouse gases at some of the most polluting and least efficient mills in America.”

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