Utility Price Lift In Flux and Transition Act; UPLIFT Act
Summary
The UPLIFT Act aims to amend the Internal Revenue Code of 1986 by introducing a refundable tax credit for residential energy expenditures. This credit is designed to alleviate the financial burden on individuals and families due to rising energy costs. The credit amount is capped at $1,200 for individuals and $2,400 for joint filers or heads of household, with a phaseout based on modified adjusted gross income.
Expected Effects
If enacted, the UPLIFT Act would provide direct financial assistance to eligible taxpayers to offset their energy expenses. The availability of the credit is contingent on the average Personal Consumption Expenditures (PCE) exceeding 102% of the previous year's average, as determined by the Bureau of Economic Analysis. This mechanism ensures the credit is activated during periods of significant energy price increases.
Potential Benefits
- Provides direct financial relief to households facing high energy costs.
- Targets assistance to those with lower and middle incomes through the MAGI phaseout.
- Offers a refundable tax credit, ensuring even those with no tax liability can benefit.
- May incentivize energy conservation as households become more aware of their energy expenditures.
- The credit does not affect eligibility for federal means-tested programs.
Potential Disadvantages
- The credit's effectiveness is dependent on the PCE exceeding a specific threshold, which may not always be met.
- The phaseout based on modified adjusted gross income could reduce or eliminate the credit for some households.
- The complexity of calculating the credit and determining eligibility may create confusion for taxpayers.
- Potential for increased government spending and budget deficits.
- The act does not address the root causes of rising energy prices.
Most Disadvantaged Areas:
Constitutional Alignment
The UPLIFT Act aligns with the Constitution's mandate to "promote the general Welfare" (Preamble). Congress has the power to lay and collect taxes to provide for the common defense and general welfare of the United States (Article I, Section 8, Clause 1). The Act's provisions for a refundable tax credit fall under Congress's authority to enact laws related to taxation and spending.
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).