H.R.1306 - Tax Fairness for Survivors Act (119th Congress)
Summary
H.R.1306, the Tax Fairness for Survivors Act, aims to amend the Internal Revenue Code of 1986 to exclude from gross income any judgments, awards, and settlements related to sexual assault or sexual harassment claims. This exclusion applies to various forms of compensation, including backpay, frontpay, punitive damages, and attorney's fees. The bill also modifies sections of the Code related to Social Security, Railroad Retirement, and Unemployment taxes, as well as wage withholding, to align with the new exclusion.
Expected Effects
The primary effect of this bill would be to provide financial relief to survivors of sexual assault and harassment by ensuring that settlements and awards received are not subject to federal income tax. This change would allow survivors to retain a greater portion of the compensation intended to help them recover and rebuild their lives. It also simplifies tax compliance for survivors by removing the burden of calculating and paying taxes on these amounts.
Potential Benefits
- Provides financial relief to survivors of sexual assault and harassment.
- Simplifies tax compliance for survivors.
- Ensures that survivors retain a greater portion of their settlements and awards.
- Acknowledges the unique financial burdens faced by survivors.
- May encourage more survivors to come forward and seek legal recourse.
Potential Disadvantages
- May slightly reduce federal tax revenue, although the impact is likely to be minimal.
- Could potentially create complexities in distinguishing between taxable and non-taxable settlements if not carefully regulated.
- May disproportionately benefit higher-income survivors who receive larger settlements.
- Could incentivize frivolous claims if not properly vetted.
- Requires clear definitions and regulations to prevent abuse.
Constitutional Alignment
The bill aligns with the general welfare clause of the Constitution, as it seeks to provide support and relief to a vulnerable population. Specifically, the bill falls under Congress's power to lay and collect taxes, duties, imposts, and excises, as defined in Article I, Section 8. By creating an exception to taxable income, Congress is exercising its authority to determine the scope and application of tax laws. The bill does not appear to infringe upon any specific constitutional rights or protections.
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).