Tax Breaks for Polluters Grow to $17.8 billion

The non-partisan Congressional Joint Committee on Taxation reports that tax breaks for polluting industries are expected to grow to $17.8 billion over the next five years.

The report, Estimates of Federal Tax Expenditures for Fiscal Years 1999-2003, presents new information about the billions in annual tax breaks that reward corporations for polluting air and water, scraping landscapes, and clear cutting forests. Last year the estimate of polluting tax breaks was $15.3 billion over five years.

The primary industrial beneficiaries of these environmentally-harmful tax giveaways are oil and gas, mining, timber and agribusiness corporations.

The tax breaks for polluters include:

* $11 billion for tax breaks and loopholes that subsidize exploration and production activities for the polluting oil and gas industry.

* $1.9 billion for special tax breaks to the mining industry--some of which comes from mining minerals on public lands.

* $900 million is special provisions for timber companies, driving down the costs of virgin wood products at the expense of recycled goods.

* $3.9 billion for loopholes intended to benefit small farmers but that primarily benefit large agribusiness.

"Tax loopholes continue to reward corporations that pollute the air and water, drill for oil and gas, and cut down forests," said Brian Dunkiel, Friends of the Earth's Director of Tax Policy. "It is time to put an end to these unnecessary and harmful subsidies."

Corporate Predator Sues Courts Under NAFTA

A Canadian funeral home chain has sued under the North American Free Trade Agreement to overturn a Mississippi state court finding that the chain committed unlawful anti-competitive and predatory acts in its attempt to dominate local funeral markets. The Loewen Group, which operates more than 700 funeral homes and 109 cemeteries in the United States, also claims damages under the obscure but powerful NAFTA provision allowing corporations to directly sue governments for compensation over government actions that interfere with investor rights. It is the first such claim filed against the U.S. government under NAFTA's Chapter 11 "investor-to-state" provisions, according to Public Citizen.

A Mississippi jury in 1995 awarded $100 million in compensatory damages and $400 million in punitive damages to plaintiff Jeremiah O'Keefe, a Biloxi businessman. Loewen ultimately settled the case for $150 million rather than appeal to a higher court in Mississippi, but NAFTA allows an appeal to an international tribunal, where proceedings are conducted in secret and the records are not publicly accessible. The tribunal's decision will be final and binding, and no one else can intervene or even hear the arguments presented.

"If successful, U.S. taxpayers could be forced to shell out hundreds of millions of dollars to a Canadian company found by a judge and jury to have committed malicious and fraudulent business practices," Public Citizen noted. "The case also could set a precedent that would embolden any number of other North American corporations to use NAFTA to challenge laws, policies or jury verdicts they find objectionable. NAFTA has already been used by U.S.-based corporations seeking to challenge Canadian and Mexican environmental laws that cost them money."

Health Insurance Premiums Going Up

Many of the 16 million Americans under 65 who have to buy their own health insurance are facing increases of 40 percent or more this fall, creating a dynamic that appears likely to send prices of health insurance even higher, the New York Times reported Dec. 5. Those who are self-employed, work for small employers who do not offer health insurance, or retired early, often because of poor health, are a step away from joining the nation's 43.3 million uninsured, too young for Medicare, the federal insurance for the elderly, but not poor enough for Medicaid. Premiums are also rising for many of the 160 million Americans covered by employers' group policies, with increases in the next year projected at 8 percent to 20 percent.

Study Outlines $1.26b in Lobbyist Spending

Pharmaceutical and health products manufacturers led all industries in lobbying expenditures during 1997 at $74.4 million, followed by insurance ($65.9 million), telephone utilities ($62.1 million), oil and gas ($62 million), electric utilities ($54.3 million), and health professionals ($43.2 million), a comprehensive new report by the non-partisan Center for Responsive Politics reveals. Influence Inc.: Lobbyist Spending in Washington, reports that interest groups spent $1.26 billion--or roughly $2.4 million per member of Congress--during 1997, the last full year for which data are available.

Among other highlights of the report, available online at (www.crp.org):

* The financial sector (finance, insurance, and real estate) led the way both in lobbying expenditures ($177.1 million in 1997) and campaign contributions ($93 million in the first 18 months of 1997-98) among the 13 broad economic sectors. The health sector was second in lobbying expenditures ($158.5 million) and sixth in campaign contributions ($34 million).

* Some 218 organizations spent at least $1 million in 1997 to lobby Congress and the executive branch, including 41 that spent at least $5 million and eight that spent at least $10 million.

* A total of 101 lobbying firms reported at least $1 million in income during 1997. Topping the list at $18.8 million was the law firm Verner, Liipfert, Bernhard, McPherson & Hand, which employs former Senate Majority Leaders Robert Dole and George Mitchell. Some $10.3 million of the firm's revenue came from just five clients--all tobacco companies.

* Membership organizations that are generally thought to pack considerable lobbying clout on Capitol Hill, like the American Association of Retired Persons, the American Israel Public Affairs Committee, the National Rifle Association, and the Sierra Club, as well as labor unions, tended to fall far down the list of lobbying spenders. These groups can flex their muscle without paying for large contingents of expensive lobbyists by mobilizing their active memberships.

The report is based on disclosures filed with the Secretary of the Senate and the Clerk of the House under the Lobbying Disclosure Act of 1995. The records were hand entered by Center researchers and coded using the system the Center has pioneered in its study of campaign contributions to categorize organizations by industry and sector.

In addition to the report, the Center will post the entire 1997 lobbyist database in searchable form at www.crp.org.

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