Part 3 is a five week series exposing as the South’s largest forest destroyer…
Our previous two entries have detailed ’s (IP) gigantic global impact on the world’s forests. Now would it really surprise you to find out that one of the world’s largest corporations would constantly have their hands reaching out for state and federal handouts? IP is a huge recipient of misguided taxpayer subsidies and often leads the charge for huge payouts and tax breaks, time and time again convincing the government that they and colleagues in the paper industry will fall into financial ruin without the free money.
Several months back, Dogwood Alliance and our partners exposed the Black Liquor loophole and called for its closure. Big paper companies, led by , found a loophole in the 2005 Transportation bill that they have exploited for billions of dollars in free money at the taxpayers expense. The loophole in the 2005 federal bill was intended to stimulate production of alternative fuels for vehicles. Instead, it has increased consumption of fossil fuel and threatened to strike a catastrophic blow to the recycled paper collection and manufacturing industries, while making IP and its cronies rich.
Paper companies, in a scheme devised by consultants, are now being richly rewarded for the long-standing practice of using a byproduct of the wood pulping process known as “black liquor” as a fuel to run their mills. In March of 2009, received a first payment of $71.6 MILLION for ONE MONTH of burning the fuel last year, and one report estimates they could stand to receive payment of up to $3.7 BILLION.
You can read more about the issue here and go here to take action to stop this taxpayer boondoggle.
And this just in, though the loophole was set to expire at the end of this year, and other large paper companies just got a ruling that will allow them to collect free subsidies until 2013, meaning a total giveaway just shy of the highly publicized bailout received by the auto industry.
From a story in tax.com by Martin Sullivan:
“Well, believe it or not, the IRS has just given the industry a green light to use an even larger loophole. The source of this fantastic news for pulp producers is a just-released legal memorandum (ILM 200941011) from the IRS chief counsel dated June 3, 2009. The memo says that when the alcohol fuel mixture credit expires at the end of this year, black liquor will still be eligible for an even more generous tax credit — the $1.01-per-gallon cellulosic biofuel producer credit. It is not scheduled to expire until the end of 2012. By our estimates, this credit will provide the paper industry with $25 billion of additional tax benefits that Congress never intended.”
That is billion with a B! Add to that the tax shelters provided to IP and other paper companies from massive land sales earlier this decade, millions of dollars in state and local funds to woo the companies to their area, and government funded cost share programs for planting trees in plantations and you have a whole lot of cash. Seems like taxpayers need a break from the pulp and paper industry!
Check back next week to learn more about how spends millions of dollars funding greenwashing.
Paid for using your tax dollars.