H.R.3322 - Solid American Hardwood Tax Credit Act (119th Congress)
Summary
H.R.3322, the Solid American Hardwood Tax Credit Act, proposes to amend the Internal Revenue Code of 1986 by modifying the energy efficient home improvement credit to include expenditures for natural carbon sinks. Specifically, it introduces a tax credit for the purchase and installation of certain wood products made from U.S.-grown deciduous trees, used in residential construction or renovation. The bill also extends the existing energy efficient home improvement credit through 2035.
Expected Effects
If enacted, this bill would incentivize the use of American hardwood in home construction and renovation through tax credits. This could stimulate the domestic timber industry and potentially reduce the carbon footprint of homes. The extension of the existing credit provides continued support for energy-efficient home improvements.
Potential Benefits
- Supports the domestic timber industry: Creates demand for American hardwood products.
- Incentivizes carbon sequestration: Encourages the use of wood, a natural carbon sink, in homes.
- Reduces the cost of home improvement: Provides tax credits for homeowners.
- Promotes sustainable building practices: Encourages the use of renewable resources.
- Extends existing energy efficiency incentives: Continues support for broader energy-efficient home improvements.
Potential Disadvantages
- Potential for fraud or abuse: Difficulty in verifying the origin and processing of wood products.
- Limited scope: Only applies to specific types of wood products and may not significantly impact overall carbon emissions.
- Increased complexity of the tax code: Adds another layer of complexity to the existing energy efficient home improvement credit.
- Potential cost to taxpayers: Tax credits reduce government revenue.
- Possible market distortion: May favor hardwood over other potentially more sustainable building materials.
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution (Preamble), as it aims to promote economic activity and environmental sustainability. Article I, Section 8 grants Congress 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. This bill falls under that purview as it modifies the tax code to incentivize certain behaviors.
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).