Investing in American Workers Act
Summary
The "Investing in American Workers Act" introduces a tax credit for employer-provided worker training. This credit aims to incentivize businesses to invest in the skills development of their non-highly compensated employees. The bill amends the Internal Revenue Code of 1986 to establish this new credit, which is calculated as a percentage of qualified training expenditures exceeding a baseline average.
Expected Effects
The bill will likely increase employer investment in worker training programs, particularly for those leading to recognized postsecondary credentials. Small businesses may benefit from the option to apply the credit against payroll taxes. The Act also directs the Secretary of Labor to issue guidance on defining "recognized postsecondary credential."
Potential Benefits
- Encourages employers to invest in worker training, leading to a more skilled workforce.
- Provides a financial incentive for training programs that result in recognized postsecondary credentials.
- Allows small businesses and tax-exempt organizations to apply the credit against payroll taxes, improving cash flow.
- May lead to increased wages and career advancement opportunities for non-highly compensated employees.
- Could reduce the skills gap and improve overall economic productivity.
Potential Disadvantages
- The complexity of calculating the credit and complying with the regulations may create an administrative burden for businesses.
- The definition of "qualified training" may be too narrow, excluding valuable training programs that do not lead to postsecondary credentials.
- The focus on non-highly compensated employees may disincentivize training for other employees.
- The credit may disproportionately benefit larger companies with established training programs.
- There is a potential for employers to manipulate training programs to qualify for the credit without providing meaningful skills development.
Constitutional Alignment
The bill aligns with the Constitution's broad mandate to "promote the general Welfare" (Preamble). 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, Clause 1). This bill uses the tax code to incentivize certain behaviors (worker training) that are deemed to be in 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).