Critical Minerals Investment Tax Modernization Act of 2025
Summary
The "Critical Minerals Investment Tax Modernization Act of 2025" aims to amend the Internal Revenue Code of 1986 by adjusting the percentage depletion rate for certain rare earth elements and scandium. Specifically, it modifies Section 613(b)(1)(B) to include these elements in the 22 percent depletion rate category. The amendment applies to taxable years beginning after the enactment of the Act.
Expected Effects
This act will likely incentivize domestic mining and production of rare earth elements by providing tax benefits to companies involved in their extraction. This could lead to increased investment in the rare earth mining sector within the United States. The change aims to reduce reliance on foreign sources for these critical minerals.
Potential Benefits
- Increased domestic production of rare earth elements.
- Potential job creation in the mining and related industries.
- Reduced reliance on foreign suppliers for critical minerals.
- Enhanced national security by securing domestic access to essential resources.
- Attracts investment in the domestic mining sector.
Potential Disadvantages
- Potential environmental impacts from increased mining activities.
- Possible displacement of foreign suppliers, impacting international trade relations.
- The tax benefits could disproportionately favor large mining corporations.
- Increased mining could strain local infrastructure and resources.
- The cost of tax breaks could impact government revenue.
Most Disadvantaged Areas:
Constitutional Alignment
The bill falls under the purview of Congress's power to lay and collect taxes, duties, imposts, and excises, as outlined in Article I, Section 8, Clause 1 of the Constitution. The bill does not appear to infringe upon any specific constitutional rights or limitations. The adjustment of tax rates is a power explicitly granted to Congress.
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).