H.R.701 - Restoring Establishment Deductions and Uplifting Competition to Ease Food Prices Act; REDUCE Food Prices Act (119th Congress)
Summary
H.R. 701, the REDUCE Food Prices Act, aims to incentivize the establishment and operation of small food retail businesses in areas with high food retail concentration and low competition. The bill proposes amendments to the Internal Revenue Code of 1986, offering tax credits and deductions to qualified small food retail businesses. These incentives include increased rehabilitation tax credits, work opportunity tax credits, bonus depreciation, and qualified business income deductions.
The bill also introduces a new food retail business tax credit for new small food retail businesses. The goal is to increase competition in the retail food sector, particularly in areas where it is lacking, and ultimately lower food prices for consumers.
This is achieved by providing financial benefits to small businesses that operate in underserved areas, encouraging them to establish and expand their operations.
Expected Effects
The likely effect of this bill is an increase in the number of small food retail businesses operating in low-competition areas. This could lead to lower food prices for consumers in those areas, as well as increased access to fresh and healthy food options.
Additionally, the tax incentives could stimulate economic activity in these communities, creating jobs and boosting local economies. The bill could also encourage more investment in the retail food sector, leading to innovation and improved services.
Potential Benefits
- Lower Food Prices: Increased competition among retailers can drive down prices for consumers.
- Improved Access to Food: More retail options in underserved areas can make it easier for people to access fresh and healthy food.
- Job Creation: The establishment and operation of new businesses can create jobs in local communities.
- Economic Development: Tax incentives can stimulate investment and economic activity in targeted areas.
- Support for Small Businesses: The bill provides targeted support to small food retail businesses, helping them to compete with larger chains.
Potential Disadvantages
- Potential for Abuse: The tax incentives could be exploited by businesses that do not genuinely meet the criteria for qualification.
- Complexity: The bill introduces several new definitions and rules, which could make it difficult for businesses to understand and comply with.
- Limited Scope: The bill only targets small food retail businesses, which may not be sufficient to address the broader issue of food prices.
- Cost to Taxpayers: The tax incentives will reduce government revenue, which could lead to higher taxes or cuts in other programs.
- Market Distortion: The tax incentives could distort the market by giving an unfair advantage to certain businesses.
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution (Preamble), which empowers Congress to promote the well-being of the population. By aiming to lower food prices and increase access to food, the bill could be seen as fulfilling this mandate.
However, the Constitution does not explicitly address the regulation of food retail or the provision of tax incentives to specific industries. The power to tax and spend for the general welfare is a broad one, and the courts have generally deferred to Congress's judgment in this area.
The bill does not appear to infringe on any specific constitutional rights or protections.
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).