Cultivating Investment in Recycling and Circular Local Economies Act of 2025; CIRCLE Act
Summary
The Cultivating Investment in Recycling and Circular Local Economies Act of 2025, or CIRCLE Act, introduces a recycling property investment credit by amending the Internal Revenue Code of 1986. This bill aims to incentivize investment in recycling infrastructure through a tax credit. The credit is equal to 30% of the qualified investment in recycling property for a taxable year, with additional bonuses for domestic content.
Expected Effects
The CIRCLE Act is projected to stimulate the recycling industry by making investments in recycling facilities more financially attractive. This could lead to increased recycling rates and a reduction in reliance on virgin materials. The Act also includes a phase-out of the credit starting in 2033, providing a limited-time incentive for investment.
Potential Benefits
- Increased investment in recycling infrastructure.
- Promotion of domestic recycling and reduced reliance on international actors.
- Potential for job creation in the recycling sector.
- Reduced environmental impact through increased recycling rates.
- Support for domestic markets by increasing the supply of domestically recycled materials.
Potential Disadvantages
- Potential for increased government debt due to tax credits.
- Possible complexities in defining and verifying 'qualified recycling property'.
- The phase-out structure could lead to a boom-and-bust cycle in recycling investments.
- The effectiveness of the credit depends on the actual utilization by businesses.
- Potential for unintended consequences if the definition of 'recycle' is not sufficiently precise.
Constitutional Alignment
The CIRCLE Act aligns with the general welfare clause of the Constitution (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 Act uses taxation to incentivize behavior that promotes environmental protection and economic development, which can be argued as promoting 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).