H.R.574 - Accelerate Long-term Investment Growth Now Act; ALIGN Act (119th Congress)
Summary
H.R.574, the Accelerate Long-term Investment Growth Now Act (ALIGN Act), proposes to amend the Internal Revenue Code of 1986 to permanently allow a tax deduction at the time an investment in qualified property is made. This bill aims to incentivize investment by making full expensing for qualified property permanent. The bill was introduced in the House of Representatives on January 21, 2025, and referred to the Committee on Ways and Means.
Expected Effects
If enacted, H.R.574 would eliminate the gradual phase-out of full expensing that was previously scheduled. This could lead to increased investment in qualified property, as businesses would be able to deduct the full cost of these investments immediately. The change could also affect government revenue due to the increased deductions.
Potential Benefits
- Increased Investment: Permanent full expensing could encourage businesses to invest more in qualified property.
- Simplified Tax Planning: Businesses would have greater certainty in their tax planning due to the permanent nature of the deduction.
- Economic Growth: Increased investment could lead to economic growth through increased productivity and job creation.
- Reduced Complexity: The bill simplifies the tax code by removing the need to calculate depreciation over multiple years.
- Competitiveness: Encourages domestic investment, potentially making US businesses more competitive.
Most Benefited Areas:
Potential Disadvantages
- Revenue Reduction: The immediate deduction of expenses could reduce government tax revenue in the short term.
- Potential for Abuse: The definition of "qualified property" would need to be carefully monitored to prevent abuse of the deduction.
- Increased Deficit: Reduced tax revenue could contribute to increased budget deficits.
- Uneven Distribution: The benefits of the tax deduction may disproportionately favor large corporations with significant capital investments.
- Complexity in Transition: Transitioning to a permanent full expensing system may create complexities for businesses that have already made investment decisions based on the existing depreciation rules.
Most Disadvantaged Areas:
Constitutional Alignment
The bill falls under the purview of Congress's power to lay and collect taxes, duties, imposts, and excises, as outlined in Article I, Section 8, Clause 1 of the Constitution. The bill does not appear to infringe upon any specific constitutional rights or limitations. The power to create tax laws is explicitly granted to Congress.
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).