The Good Economist May 2016 - Page 8

Emerging

Policy

EPA Proposes Regulations to Improve Chemical Process Safety

On March 14, the U.S. Environmental Protection Agency proposed rules to amend the Accidental Release Prevention Requirements of Risk Management Program (RPM) policy surrounding the prevention of chemical disasters.

The EPA adopted RPM on July 31, 2014 in response to several catastrophic chemical facility incidents. RMP was tasked with strengthening community planning and preparedness, enhancing federal operational coordination, improving data management, and modernizing policies and regulations regarding chemicals. More than 110 million Americans still live in danger of high-risk chemical exposure, making the EPA’s revision of RMP timely and crucial; however, these changes must actually result in positive change.

Major chemical releases cause extremely large economic and business losses. Impacts on businesses can easily reach far beyond the businesses directly affected through injury, damage or evacuation. Damage and loss of production and employment at RMP facilities themselves, and damage and disruption to the surrounding community, causes loss of business and income broadly. For example, the 2014 hazardous chemical spill into the Elk River near Charleston, West Virginia cost local businesses and the local economy $19 million a day.

using the incentives to increase the adoption of clean energy technologies. So, it is not surprising that the issue became an important topic during the most recent mayoral election, with several candidates offering their own proposals containing varied aims.

Domb, a realtor elected to City Council last November, stated his goal is to spur private investment in underdeveloped, outlaying neighborhoods - such as North and West Philadelphia - that have been largely left out of the recent development boom. However, the potential beneficiaries of this legislation will not be limited to these neighborhoods. It could be a huge boon for condominium development as well. A developer could construct a 20-unit complex in which each condo buyer is entitled to receive a 20-year abatement so long as the purchase price is less than $250,000.

Regardless of who stands to gain, the bill is headed for an uphill political climb. It must clear a series of hurdles both here as well as in Harrisburg. The General Assembly will have to grant permissive legislation considering a clause in the Pennsylvania Constitution requires municipalities to tax all properties uniformly.

effective tax rate of negative 11.1 percent between 2008 and 2012, receiving refunds in the billions. While the Joint Committee on Taxation estimates that the CFC Look-Through Rule would reduce revenues by about $21.8 billion over the 2016-2025 period. These figures levy a broader public cost aside from their sheer financial magnitude. Lost tax revenue bring about changes to public spending priorities as well as increase the federal deficit.

Despite their substantial price tag, Congress permanently enshrined the Active Financing Exception into law and extended the CFC Look-Through Rule for another five years as part of the omnibus spending deal.

These two tax loopholes benefit multinational corporations at the expense of small business. Multinational corporations are permitted to thrive off of American infrastructure, economy, and education, while, at the same time, failing to contribute their fair share in taxes. A 2014 report by U.S. Public Interest Research Group found that 82 of the 100 largest publicly traded U.S. companies diverted revenue offshore to avoid taxes. Small businesses, in turn, are proud to pay taxes and invest in their communities. However, this commitment to domestic investment should not be at the expense of multinational corporations. Pennsylvania small businesses would need to pay an average of $4,217 in additional taxes in order to make up the difference in government revenue lost by tax avoidance.

Businesses should compete on the provision of goods and services, not their ability to hire special interest lobbyist. For this reason, the small business community has shown such strong support for measures to close offshore tax loopholes. Sixty-four percent of small business owners support ending the ability of corporations to defer paying U.S. taxes indefinitely on income diverted overseas, according to a 2013 poll conducted by the Main Street Alliance and American Sustainable Business Council.

What you need to know about this emerging policy

For small businesses, where employees often work long hours and are earning more than $455 per week, the proposed rule could be significant. If multiple employees are routinely working beyond normal work hours, overtime pay could reasonably increase personnel expenses.

What dO you need to know about this emerging policy

The U.S. Environmental Protection Agency proposed rules to amend the Accidental Release Prevention Requirements of Risk Management Program (RPM) policy surrounding the prevention of chemical disasters.

Major chemical releases cause extremely large economic and business losses.

Small businesses broadly support stronger regulation of hazardous chemicals

8