H.R.1833 - Working Families Tax Cut Act (119th Congress)
Summary
H.R.1833, the "Working Families Tax Cut Act," proposes to rename the standard deduction to the "guaranteed deduction" and introduce a bonus guaranteed deduction for the 2026 and 2027 tax years. The bill was introduced in the House of Representatives by Ms. Malliotakis and referred to the Committee on Ways and Means.
The bonus deduction would provide additional tax relief, with amounts varying based on filing status and subject to income limitations. The bill includes adjustments for inflation beginning in 2027.
This legislation aims to provide targeted tax relief to working families by enhancing the standard deduction for a limited time.
Expected Effects
The primary effect of this bill would be a temporary reduction in the tax burden for certain taxpayers in 2026 and 2027. The name change from "standard deduction" to "guaranteed deduction" is largely semantic but could influence public perception.
The bonus deduction is phased out for higher-income earners, focusing the benefits on lower and middle-income families. The change would also necessitate updates to various sections of the Internal Revenue Code to reflect the new terminology.
Potential Benefits
- Provides a bonus tax deduction for the 2026 and 2027 tax years.
- Targets tax relief towards lower and middle-income families through income-based phaseouts.
- Adjusts the bonus deduction for inflation in 2027, maintaining its real value.
- Simplifies tax filing for those who take the standard deduction (now "guaranteed deduction").
- Could stimulate economic activity by increasing disposable income for working families.
Potential Disadvantages
- The bonus deduction is temporary, expiring after 2027, which could create uncertainty for taxpayers.
- The income-based phaseout may reduce the benefit for some middle-income families.
- The name change from "standard deduction" to "guaranteed deduction" may cause confusion initially.
- The bill may increase the complexity of the tax code due to the temporary bonus deduction and its phaseout.
- Potential for increased budget deficits if the tax cut is not offset by spending cuts or revenue increases.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the constitutional power of Congress to lay and collect taxes, as outlined in Article I, Section 8, Clause 1. The bill's provisions for tax deductions and adjustments are within the scope of Congress's authority to establish rules for taxation.
The bill does not appear to infringe upon any individual rights or liberties protected by the Constitution or its amendments. The tax benefits are applied generally and do not discriminate against any particular group.
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).