H.R.2507 - Helping to Encourage Real Opportunities (HERO) for Youth Act of 2025 (119th Congress)
Summary
H.R.2507, the "Helping to Encourage Real Opportunities (HERO) for Youth Act of 2025," aims to modify the work opportunity credit within the Internal Revenue Code of 1986. The bill focuses on expanding and modifying the existing Work Opportunity Tax Credit (WOTC) for certain youth employees. It seeks to incentivize employers to hire young individuals, particularly those from disadvantaged backgrounds, by offering tax credits.
Expected Effects
The HERO Act is likely to increase employment opportunities for youth, especially disconnected youth and those from foster care. By modifying the WOTC, the bill could lead to changes in hiring practices and potentially reduce unemployment rates among targeted youth demographics. It may also impact the federal budget through changes in tax revenue.
Potential Benefits
- Increased Employment for Youth: The bill incentivizes businesses to hire young individuals, providing them with valuable work experience.
- Support for Disconnected Youth: By specifically targeting disconnected youth, the bill aims to integrate them into the workforce and provide them with skills and income.
- Support for Former Foster Children: The bill extends benefits to former foster children, providing them with employment opportunities and support as they transition into adulthood.
- Simplification of Credit: The bill removes certain restrictions on the credit, making it easier for employers to claim the credit.
- Potential Reduction in Poverty: By providing employment opportunities, the bill could help reduce poverty among young individuals and their families.
Potential Disadvantages
- Potential for Abuse: Employers may attempt to exploit the credit by hiring youth solely for the tax benefit, without providing meaningful employment or training.
- Administrative Burden: Businesses may face increased administrative burden in documenting eligibility for the credit.
- Limited Scope: The credit is limited to certain youth employees, potentially excluding other disadvantaged groups from benefiting.
- Potential Revenue Loss: The expansion of the credit could lead to a decrease in federal tax revenue.
- Uncertainty of Long-Term Impact: The long-term impact of the credit on youth employment and economic outcomes is uncertain.
Constitutional Alignment
The bill appears to align with the Constitution's general welfare clause (Preamble). Article I, Section 8, Clause 1 grants Congress the power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States. This bill uses the tax code to incentivize employment, which can be argued as promoting the general welfare by reducing unemployment and poverty. There are no apparent infringements on individual liberties or rights outlined in the Bill of Rights.
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).