US infrastructure bill means more demand but more taxes

The Infrastructure Investment and Jobs Act, which passed the US Senate on Aug. 10, is a mixed bag for chemical makers, who applaud the spending it calls for but are complaining about the new taxes in it. The $1.2 trillion bill includes $550 billion in infrastructure spending over the next 5 years, which should lead to additional demand for chemical products. In a conference call with analysts last month, Dow’s chief financial officer, Howard Ungerleider, said the measure “has the potential to further elevate the already strong” economic growth estimates. But the industry doesn’t like a proposed tax on chemicals meant to raise money to clean up legacy pollution at Superfund sites. A prior tax expired in the 1990s. The American Chemistry Council, a trade group, says it is “gravely concerned and baffled” by the tax. It estimates the tax will cost the industry $1.2 billion and lead to the closure of 44 chemical plants. However, in a research note, the debt-rating agency Moody’s says the tax amounts to less than $10 per metric ton and would, at most, increase chemical prices by 1%.