Shelter Act
Summary
The Shelter Act aims to amend the Internal Revenue Code of 1986 by introducing tax credits for disaster mitigation expenditures for both individuals and businesses. For individuals, it establishes a nonrefundable personal credit, while for businesses, it introduces a disaster mitigation credit. The credits are designed to incentivize investments in measures that reduce the impact of natural disasters.
Expected Effects
The Act could lead to increased investment in disaster-resistant infrastructure and property improvements by individuals and businesses. This could reduce the financial burden on individuals and businesses after natural disasters. It may also encourage the development and adoption of new disaster mitigation technologies and practices.
Potential Benefits
- Incentivizes homeowners and businesses to invest in disaster mitigation measures, reducing potential damage from natural disasters.
- Provides financial relief through tax credits, making mitigation efforts more affordable.
- Could stimulate economic activity in the disaster mitigation industry, creating jobs and fostering innovation.
- May reduce the strain on federal disaster relief funds by promoting proactive mitigation.
- Encourages compliance with updated building codes and safety standards, improving overall resilience.
Potential Disadvantages
- The income phaseout for individual credits may limit the benefit for higher-income individuals.
- The credit is nonrefundable, which may not benefit lower-income individuals with little or no tax liability.
- The complexity of the eligibility criteria and documentation requirements could create administrative burdens.
- The credit amounts may not be sufficient to cover the full cost of disaster mitigation measures, especially for extensive projects.
- Potential for fraud or abuse in claiming the credits, requiring robust oversight and enforcement mechanisms.
Constitutional Alignment
The Shelter Act appears to align with the Constitution's general welfare clause (Preamble). It promotes the general welfare by encouraging disaster preparedness and mitigation. Congress's power to tax and spend for the general welfare is established through Article I, Section 8, Clause 1. The Act does not appear to infringe upon 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).