It's treated in huge facilities. We don't just flush it raw into the water

"We should properly tax/negate negative externalities" in accordance with microeconomics. It's at the core of basic economics and both conservative and liberal economists would agree with this statement. It's a well studied field. The problem is policy. I often post this, but I really wish microeconomics was a required course in high school or primary. I find it to be one of the least understood of the well-established fields, and one that matters when we get older and vote or debate on these topics.

And animals poop in your yard. Do you? It's just fertilizer.

Actually they do. This is all well documented. There have been some failed attempts to change this. But dumping in international waters is cheaper and without (financial) consequences. They dump sewage hundreds of tons of sewage on a typical journey.