The Facilitating Increased Resilience, Environmental Weatherization And Lowered Liability (FIREWALL) Act
Summary
The FIREWALL Act introduces a refundable tax credit for disaster mitigation expenditures. This credit aims to incentivize individuals to invest in measures that enhance the resilience of their homes against natural disasters. The credit covers 50% of qualified expenditures, up to a maximum of $25,000, with income-based phaseouts and inflation adjustments.
Expected Effects
The Act is expected to reduce the financial burden on individuals for disaster preparedness. It should also encourage investment in resilient infrastructure at the household level. This could lead to reduced disaster-related damages and insurance claims.
Potential Benefits
- Encourages homeowners to invest in disaster mitigation measures.
- Reduces the financial impact of disasters on individuals and communities.
- Stimulates economic activity in the construction and home improvement sectors.
- Promotes resilience and reduces reliance on government disaster relief.
- May lead to lower insurance premiums for homeowners.
Potential Disadvantages
- The income-based phaseout may limit benefits for higher-income individuals.
- The $25,000 expenditure cap may not cover all necessary mitigation measures in some areas.
- Potential for increased tax complexity and administrative burden.
- The definition of 'qualified disaster mitigation expenditure' may be too narrow or broad, leading to unintended consequences.
- Could disproportionately benefit homeowners in wealthier areas who can afford the initial investment.
Constitutional Alignment
The FIREWALL Act aligns with the Constitution's general welfare clause (Preamble). It promotes the well-being of citizens by encouraging disaster preparedness and resilience. The Act's provisions for taxation and spending fall under Congress's enumerated powers (Article I, Section 8).
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).