S.496 - Wildfire Victim Tax Relief and Recovery Act (119th Congress)
Summary
S.496, the Wildfire Victim Tax Relief and Recovery Act, aims to provide tax relief to victims of the Texas Panhandle fires. It excludes certain compensation amounts from taxable income and modifies tax rules related to involuntary conversions of livestock due to fire. The bill was introduced in the Senate by Mr. Cruz and referred to the Committee on Finance.
Expected Effects
The bill will provide financial relief to individuals and businesses affected by the Texas Panhandle fires by exempting certain disaster relief payments from federal income tax. It also amends the Internal Revenue Code to include 'fire' as a qualifying event for certain tax provisions related to livestock. These changes will primarily benefit those who suffered losses due to the specified wildfires.
Potential Benefits
- Provides tax relief to victims of the Texas Panhandle fires.
- Excludes disaster relief payments from taxable income, increasing available funds for recovery.
- Modifies tax rules related to involuntary conversion of livestock, benefiting farmers and ranchers.
- Offers financial assistance to those affected by the wildfires, aiding in their recovery efforts.
- Simplifies the tax process for affected individuals and businesses.
Potential Disadvantages
- May slightly reduce federal tax revenue, although the impact is likely minimal.
- Could create a precedent for similar tax relief measures in other disaster situations, potentially increasing future costs.
- The benefits are geographically limited to the Texas Panhandle fires, potentially raising concerns about fairness from victims of other disasters.
- The complexity of tax law may still require affected individuals to seek professional assistance.
- Potential for fraud or abuse in claiming disaster relief payments.
Constitutional Alignment
The bill aligns with the general welfare clause of the Constitution (Preamble), as it aims to provide relief to citizens affected by a natural disaster. Congress has the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States (Article I, Section 8). Providing tax relief falls under the power to provide for the general welfare.
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).