Redistribution of Billions by Instituting New High-Income Obligations on Overlooked Debt Act; ROBINHOOD Act
Summary
The ROBINHOOD Act introduces a 20% excise tax on secured loans and lines of credit for individuals with an adjusted gross income exceeding $400,000 (or $450,000 for joint returns). This tax applies to loans secured by capital assets, excluding residential mortgages, home equity loans, margin loans, and loans secured by farmland. The bill aims to ensure high-income individuals pay their fair share of taxes by targeting borrowing practices.
Expected Effects
The Act will likely increase the cost of borrowing for high-income individuals using secured loans and lines of credit. This could reduce their borrowing activity and potentially increase government revenue. The funds could be used for other government programs.
Potential Benefits
- Increased government revenue from the new excise tax.
- Potential for reduced income inequality through wealth redistribution.
- May discourage excessive borrowing by high-income individuals.
- Could fund public services or reduce the national debt.
- Addresses perceived unfairness in the tax system.
Most Benefited Areas:
Potential Disadvantages
- May discourage investment and economic activity by high-income individuals.
- Could lead to tax avoidance strategies.
- Potential for negative impact on the value of capital assets used as collateral.
- Increased complexity in the tax code.
- May disproportionately affect individuals with legitimate business needs.
Most Disadvantaged Areas:
Constitutional Alignment
The ROBINHOOD Act falls under the purview of Congress's power to tax, as outlined in Article I, Section 8, Clause 1 of the Constitution, which grants Congress the power to lay and collect taxes, duties, imposts, and excises. The bill does not appear to infringe upon any specific constitutional rights or protections. However, the fairness and equity of the tax could be subject to debate.
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).