Buying American Cotton Act of 2026
Summary
The "Buying American Cotton Act of 2026" aims to incentivize the consumption of domestically produced cotton by establishing a domestic cotton consumption credit. This credit, calculated based on the volume of qualified cotton in eligible articles sold, the applicable percentage (depending on where processing occurs), and the applicable cotton market price, would be available to taxpayers. The bill amends the Internal Revenue Code of 1986 to include this new credit.
Expected Effects
The primary effect of this act would be to increase the demand for U.S.-grown cotton. This would likely lead to increased production and potentially higher prices for domestic cotton. The act also aims to establish a trustworthy supply chain tracing system for cotton products.
Potential Benefits
- Increased demand for U.S.-grown cotton, benefiting American farmers.
- Potential for job creation in the domestic textile industry.
- Incentivizes domestic processing of cotton, further supporting American jobs.
- Establishes a tracing system, potentially improving transparency in the cotton supply chain.
- Provides a tax credit, which could lower costs for businesses using American cotton.
Potential Disadvantages
- Potential for increased costs for consumers due to reliance on potentially more expensive domestic cotton.
- The complexity of the credit calculation and tracing system could create administrative burdens for businesses.
- Possible trade disputes if the act is perceived as protectionist by other countries.
- The credit may disproportionately benefit larger cotton producers and textile companies.
- Potential for fraud or abuse in the credit claiming process.
Constitutional Alignment
The bill appears to align with the Commerce Clause (Article I, Section 8, Clause 3) by regulating interstate and international commerce related to cotton. The power to tax and spend for the general welfare (Article I, Section 8, Clause 1) provides a basis for the tax credit. The bill does not appear to infringe on any specific constitutional rights or limitations.
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).