H.R.137 - TCJA Permanency Act (119th Congress)
Summary
H.R.137, the TCJA Permanency Act, seeks to make permanent several provisions of the 2017 Tax Cuts and Jobs Act (TCJA) that are currently set to expire. These provisions primarily affect individual income taxes, deductions, and estate and gift taxes. The bill aims to provide long-term certainty in the tax code for individuals, families, and small businesses.
Expected Effects
If enacted, the TCJA Permanency Act would result in the continuation of lower individual income tax rates, an increased standard deduction, and modifications to the child tax credit. It would also make permanent changes to various deductions, exclusions, and the estate and gift tax exemption. The changes would likely affect federal revenue and the distribution of the tax burden across different income groups.
Potential Benefits
- Tax Certainty: Provides long-term stability in the tax code, allowing individuals and businesses to plan more effectively.
- Lower Tax Burden: Many individuals and families would experience lower income tax liabilities compared to pre-TCJA levels.
- Increased Standard Deduction: Simplifies tax filing for many by reducing the need to itemize.
- Enhanced Child Tax Credit: Offers greater financial support to families with children.
- Small Business Benefits: Permanency of pass-through entity deductions could encourage investment and job creation.
Potential Disadvantages
- Increased Deficit: Making the TCJA provisions permanent would likely increase the federal budget deficit and national debt.
- Regressive Impact: The benefits of the TCJA disproportionately favor higher-income individuals, potentially exacerbating income inequality.
- Complexity: While some provisions simplify taxes, others introduce new complexities.
- State and Local Tax (SALT) Deduction Limit: The $10,000 cap on SALT deductions remains, disproportionately affecting residents of high-tax states.
- Potential for Reduced Public Services: Increased deficits could lead to cuts in government programs and services.
Most Disadvantaged Areas:
Constitutional Alignment
The bill primarily deals with tax policy, which falls under the purview of Congress as outlined in Article I, Section 8 of the Constitution, granting Congress the power to lay and collect taxes. The Sixteenth Amendment allows Congress to levy an income tax without apportionment among the states. 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).