S.1323 - The Facilitating Increased Resilience, Environmental Weatherization And Lowered Liability (FIREWALL) Act (119th Congress)
Summary
The FIREWALL Act (S.1323) proposes a refundable tax credit for individual disaster mitigation expenditures. This credit aims to incentivize homeowners in areas prone to natural disasters to invest in measures that increase the resilience of their homes against events like wildfires, hurricanes, and floods. The bill amends the Internal Revenue Code of 1986 to introduce this new credit, outlining specific eligible expenditures and limitations.
Expected Effects
The primary effect of the FIREWALL Act would be to reduce the financial burden on homeowners who undertake disaster mitigation projects. This could lead to increased investment in resilient building practices and technologies. It may also reduce the long-term costs associated with disaster recovery for both individuals and the government.
Potential Benefits
- Financial Relief: Provides direct financial assistance to homeowners through a refundable tax credit.
- Increased Resilience: Encourages investment in home improvements that reduce damage from natural disasters.
- Reduced Disaster Costs: Potentially lowers overall costs associated with disaster recovery for individuals and the government.
- Economic Stimulus: Could stimulate local economies by increasing demand for construction and related services.
- Improved Safety: Enhances the safety and security of homes and communities in disaster-prone areas.
Potential Disadvantages
- Complexity: Introduces a new layer of complexity to the tax code, potentially requiring additional paperwork and understanding for taxpayers.
- Potential for Abuse: The refundable nature of the credit could create opportunities for fraudulent claims.
- Limited Scope: The credit is subject to income limitations and maximum expenditure caps, potentially excluding some homeowners.
- Administrative Burden: Implementing and overseeing the credit could create additional administrative burdens for the IRS.
- Uncertain Effectiveness: The actual impact on disaster resilience may be difficult to measure and could be influenced by factors beyond the scope of the credit.
Constitutional Alignment
The FIREWALL Act aligns with the Constitution's broad mandate to "promote the general Welfare" (Preamble). By incentivizing disaster mitigation, the bill seeks to reduce the negative impacts of natural disasters on individuals and communities. While the Constitution does not explicitly address disaster relief, the power to tax and spend for the general welfare is well-established. The Sixteenth Amendment grants Congress the power to lay and collect taxes on incomes, which provides the constitutional basis for implementing tax credits like the one proposed in this bill.
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).