H.R.616 - To amend the Internal Revenue Code of 1986 to double the dollar limitation for the energy efficient home improvement credit with respect to heat pumps, heat pump water heaters, biomass stoves, and boilers. (119th Congress)
Summary
H.R. 616 proposes to amend the Internal Revenue Code of 1986, specifically targeting the energy efficient home improvement credit. The bill aims to double the existing dollar limitation for certain energy-efficient equipment. This includes heat pumps, heat pump water heaters, biomass stoves, and boilers.
The current credit limit of $2,000 would be increased to $4,000 for these specific items. The amendment would apply to taxable years beginning after December 31, 2024, if enacted.
The bill was introduced in the House of Representatives by Mr. Gottheimer and referred to the Committee on Ways and Means.
Expected Effects
If passed, H.R. 616 would increase the tax credit available to homeowners who invest in energy-efficient heating and water heating systems. This could incentivize more homeowners to purchase these systems, reducing energy consumption and potentially lowering utility bills.
The increased demand for these systems could also stimulate the market for manufacturers and installers of these technologies. This could lead to increased production and potentially create new jobs in the energy efficiency sector.
The change would directly impact the amount of tax credit claimed by individuals, affecting federal tax revenue.
Potential Benefits
- Reduced energy consumption: By incentivizing the purchase of energy-efficient equipment, the bill could lead to lower overall energy consumption.
- Lower utility bills: Homeowners who install these systems may experience reduced utility bills, leading to cost savings.
- Stimulated market for energy-efficient technologies: The increased tax credit could boost demand for heat pumps, biomass stoves, and related equipment, benefiting manufacturers and installers.
- Potential job creation: Increased demand could lead to more jobs in the manufacturing, installation, and maintenance of these systems.
- Environmental benefits: Reduced energy consumption can lead to lower greenhouse gas emissions and improved air quality.
Potential Disadvantages
- Potential strain on federal tax revenue: Increasing the tax credit could reduce federal tax revenue, potentially increasing the budget deficit.
- Possible inflation of equipment prices: Increased demand due to the tax credit could lead to higher prices for heat pumps and other eligible equipment, offsetting some of the benefit to consumers.
- Disproportionate benefit to higher-income households: Higher-income households may be more likely to be able to afford these upgrades and take advantage of the tax credit, potentially exacerbating existing inequalities.
- Complexity for taxpayers: Navigating the tax credit requirements and eligibility criteria can be complex for some taxpayers.
- Limited impact on overall energy consumption: The impact on overall energy consumption may be limited if only a small percentage of homeowners take advantage of the credit.
Most Disadvantaged Areas:
Constitutional Alignment
H.R. 616 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 aims to promote the general welfare by incentivizing energy-efficient home improvements.
The bill does not appear to infringe upon any specific constitutional rights or limitations. It is a straightforward amendment to the tax code designed to encourage certain behaviors through financial incentives.
Therefore, the bill appears to be constitutionally sound, as it aligns with the enumerated powers of Congress and does not violate any individual liberties or 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).