H.R.640 - Chemical Tax Repeal Act (119th Congress)
Summary
H.R. 640, the "Chemical Tax Repeal Act," aims to amend the Internal Revenue Code of 1986 by repealing excise taxes on taxable chemicals and substances. The bill was introduced in the House of Representatives on January 22, 2025, and referred to the Committee on Ways and Means. The proposed changes would take effect retroactively, starting January 1, 2024.
Expected Effects
If enacted, the Chemical Tax Repeal Act would eliminate specific excise taxes outlined in Chapter 38, subchapters B and C of the Internal Revenue Code. This would directly impact industries involved in the production and use of taxable chemicals and substances. The repeal could lead to changes in pricing, production decisions, and potentially, investment within these sectors.
Potential Benefits
- Reduced Costs for Businesses: Eliminating excise taxes lowers the financial burden on chemical and substance manufacturers, potentially leading to increased profitability.
- Increased Investment: Tax savings could incentivize companies to invest more in research, development, and expansion.
- Simplified Tax Compliance: Repealing the taxes reduces the complexity of tax filings for affected businesses.
- Potential Price Reductions: Cost savings could be passed on to consumers in the form of lower prices for products using these chemicals.
- Stimulated Economic Activity: The repeal could stimulate economic activity within the chemical and related industries.
Most Benefited Areas:
Potential Disadvantages
- Reduced Government Revenue: Repealing the taxes will decrease federal revenue, potentially impacting funding for other government programs.
- Environmental Concerns: Excise taxes can sometimes disincentivize the use of harmful chemicals; repeal could lead to increased use.
- Potential for Increased Pollution: Without the tax disincentive, companies might be less motivated to adopt environmentally friendly alternatives.
- Unfair Advantage: Some argue that repealing these taxes could give an unfair advantage to specific industries at the expense of others.
- Budget Deficit Impact: Reduced revenue could contribute to a larger budget deficit if not offset by other measures.
Most Disadvantaged Areas:
Constitutional Alignment
The bill falls under the purview of Congress's power to levy and collect taxes, as outlined in Article I, Section 8, Clause 1 of the Constitution. The Constitution grants Congress broad authority to tax and spend for the general welfare of the United States. The repeal of a tax is also a legislative power vested in Congress. There is no explicit constitutional prohibition against repealing excise taxes.
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).