H.R.2927 - All-Americans Tax Relief Act of 2025 (119th Congress)
Summary
H.R.2927, the "All-Americans Tax Relief Act of 2025," proposes several amendments to the Internal Revenue Code of 1986. Key provisions include expanding the Earned Income Tax Credit (EITC), making the Child Tax Credit fully refundable, expanding the medical expense deduction, and introducing new deductions for daycare, commuting, and tutoring expenses. The bill also includes an exclusion for interest payments on credit card debt, a rent deduction, and an increase in the capital gains rate.
Expected Effects
If enacted, this bill would significantly alter the tax landscape for many Americans, particularly low- and middle-income families. The expanded credits and deductions aim to provide financial relief and incentivize certain behaviors, such as seeking education and using public transit. However, the increase in the capital gains rate could impact investment decisions.
Potential Benefits
- Increased financial assistance for low-income families through the expanded EITC and fully refundable Child Tax Credit.
- Reduced tax burden for families with children through daycare and tutoring expense deductions.
- Potential for improved access to healthcare due to the expanded medical expense deduction.
- Incentives for using public transit through the commuting expense deduction.
- Relief from credit card debt interest through the new exclusion.
Potential Disadvantages
- Increased capital gains rate could discourage investment and potentially slow economic growth.
- The rent deduction has income phaseouts, limiting its benefit for higher-income individuals.
- The complexity of the new deductions and credits could create confusion and increase compliance costs.
- Potential for increased government debt due to the expanded tax benefits, depending on how they are financed.
- The bill's effective dates, all set for taxable years beginning after December 31, 2026, mean that the benefits are not immediate.
Most Disadvantaged Areas:
Constitutional Alignment
The bill primarily concerns taxation and spending, powers explicitly granted to Congress under Article I, Section 8 of the Constitution. The "general Welfare" clause provides a broad mandate for Congress to enact laws that promote the well-being of the population. The bill's provisions related to income thresholds and eligibility criteria appear to be within Congress's authority to define and regulate.
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).