Shelter Act
Summary
The Shelter Act aims to amend the Internal Revenue Code of 1986 by introducing tax credits for disaster mitigation expenditures for both individuals and businesses. For individuals, it proposes a nonrefundable personal credit, while for businesses, it introduces a disaster mitigation credit. The credits are designed to incentivize investments in measures that reduce the impact of natural disasters on homes and businesses.
Expected Effects
If enacted, the Shelter Act would likely increase investment in disaster mitigation measures by individuals and businesses in areas prone to natural disasters. This could lead to reduced property damage and economic losses from such events. The tax credits could also stimulate demand for related services and products, potentially creating jobs in the construction and home improvement sectors.
Potential Benefits
- Incentivizes homeowners and businesses to invest in disaster-resistant infrastructure.
- Reduces the financial burden on individuals and businesses in disaster-prone areas through tax credits.
- Potentially lowers long-term disaster relief costs for the government by promoting proactive mitigation.
- Stimulates economic activity in the construction and home improvement sectors.
- Encourages the adoption of resilient building practices and technologies.
Potential Disadvantages
- The income phaseout for individual credits may limit benefits for middle- and upper-income households.
- The credit is nonrefundable, which may not benefit lower-income individuals with limited tax liability.
- The complexity of the eligibility criteria and documentation requirements could create administrative burdens.
- Potential for fraud or abuse in claiming the credits.
- The overall effectiveness depends on the actual adoption rate and the impact of mitigation measures.
Constitutional Alignment
The Shelter Act appears to align with the Constitution's general welfare clause (Preamble). It aims to "promote the general Welfare" by encouraging disaster mitigation, potentially reducing the need for federal disaster relief. The Act falls under Congress's power to tax and spend for the general welfare, as outlined in Article I, Section 8, Clause 1. The specific provisions related to tax credits are within the purview of Congress's legislative authority.
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).