H.R.2802 - Tax Relief from Tariffs and High Costs Act (119th Congress)
Summary
H.R.2802, the "Tax Relief from Tariffs and High Costs Act," proposes a refundable tax credit for individuals in 2025. The credit would be equal to 10% of an individual's federal income tax liability for that year. However, this credit is limited to taxpayers with a modified adjusted gross income of $100,000 or less ($200,000 for joint returns).
Expected Effects
If enacted, this bill would provide a one-time tax break to eligible individuals in 2025. This could lead to increased disposable income for those individuals, potentially stimulating spending. The bill also includes conforming amendments to the Internal Revenue Code to accommodate the new credit.
Potential Benefits
- Provides a direct tax benefit to individuals, potentially alleviating financial strain.
- Could stimulate the economy through increased consumer spending.
- Targets lower and middle-income individuals, offering more significant relief to those who need it most.
- The refundable nature of the credit ensures that even those with little or no tax liability can benefit.
- Simplicity of the credit calculation (10% of tax liability) makes it easy to understand and administer.
Potential Disadvantages
- The credit is temporary (only for the 2025 tax year), providing only a short-term benefit.
- The income limitations exclude higher-income individuals, potentially seen as unfair by some.
- The bill could increase the federal budget deficit, depending on the overall economic impact.
- The focus on tariffs and high costs is not explicitly addressed within the bill's text, potentially misleading.
- A one-time credit may not address the underlying issues of tariffs and high costs effectively.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the Constitution's Article I, Section 8, which grants Congress the power to lay and collect taxes, duties, imposts, and excises to pay the debts and provide for the common defense and general welfare of the United States. The bill's provision of a tax credit falls under Congress's authority to manage the nation's finances and promote economic well-being. The specific details of the tax credit, such as income limitations and the percentage of the credit, are policy choices within Congress's purview.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).