H.R.2173 - Tools Tax Deduction Act (119th Congress)
Summary
H.R.2173, the "Tools Tax Deduction Act," proposes amendments to the Internal Revenue Code of 1986. The bill aims to allow certain deductions for expenses incurred by employees in specific trades or businesses. Specifically, it targets deductions for construction tools, personal protective clothing and gear, and other necessary expenses related to their place of employment.
Expected Effects
If enacted, this bill would provide tax relief to eligible employees by allowing them to deduct certain work-related expenses. This could reduce their overall tax burden and increase their disposable income. The change would apply to taxable years beginning after December 31, 2025.
Potential Benefits
- Reduced Tax Burden: Eligible employees, particularly those in construction and similar fields, would experience a lower tax liability.
- Increased Disposable Income: The tax deduction would free up income for workers, potentially boosting personal spending and savings.
- Fairer Tax System: The bill could be seen as making the tax system fairer by recognizing the necessary expenses employees incur to perform their jobs.
- Economic Stimulus: Increased disposable income could lead to greater consumer spending, providing a small stimulus to the economy.
Most Benefited Areas:
Potential Disadvantages
- Complexity: The bill adds complexity to the tax code, potentially requiring additional guidance and creating confusion for taxpayers.
- Revenue Loss: The tax deduction would likely result in a decrease in federal tax revenue, potentially increasing the budget deficit.
- Limited Scope: The benefits are limited to specific types of employees and expenses, excluding other professions and costs.
- Potential for Abuse: The deduction could be subject to abuse if not properly defined and enforced, leading to fraudulent claims.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the general welfare clause of the Constitution (Preamble), as it aims to improve the financial well-being of certain workers. Article I, Section 8 grants Congress the power to lay and collect taxes, duties, imposts, and excises, providing the constitutional basis for the Internal Revenue Code and its amendments. The bill does not appear to infringe upon any specific constitutional rights or limitations.
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).