H.R.440 - READY Accounts Act (119th Congress)
Summary
H.R. 440, the READY Accounts Act, introduces a new type of tax-advantaged savings account designed to help individuals accumulate funds for qualified home disaster mitigation and recovery expenses. The bill amends the Internal Revenue Code of 1986 to establish Residential Emergency Asset-accumulation Deferred Taxation Yield (READY) accounts. Contributions to these accounts would be tax-deductible, up to $4,500 annually, with potential adjustments for inflation.
Expected Effects
The primary effect of this bill would be to incentivize individuals to save specifically for home disaster preparedness and recovery. This could lead to increased resilience at the individual and community levels in the face of natural disasters. The bill also outlines specific measures that qualify for mitigation and recovery expenses, providing clarity for account holders.
Potential Benefits
- Encourages proactive financial planning for disaster preparedness.
- Provides tax benefits for saving towards home disaster mitigation and recovery.
- Could reduce the financial burden on individuals and families after disasters.
- May decrease reliance on federal disaster relief programs.
- Promotes investment in home improvements that enhance resilience to natural disasters.
Potential Disadvantages
- Potential complexity in understanding and managing READY accounts.
- The $4,500 limit may not be sufficient for all mitigation or recovery needs.
- Possible administrative burden for financial institutions and the IRS.
- Benefits primarily accrue to those who can afford to save.
- May create a new avenue for tax avoidance if not properly regulated.
Constitutional Alignment
The bill's alignment with the Constitution is primarily through the General Welfare Clause (Article I, Section 8), which allows Congress to enact laws that promote the well-being of the nation. By encouraging disaster preparedness, the bill could be argued to contribute to the general welfare. The bill also falls under the purview of Congress's power to lay and collect taxes (Article I, Section 8), as it amends the Internal Revenue Code.
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).