Flood Insurance Relief Act
Summary
The Flood Insurance Relief Act aims to amend the Internal Revenue Code of 1986 by introducing an above-the-line deduction for flood insurance premiums. This deduction would be available to individuals, subject to an adjusted gross income limitation of $200,000 for individuals and $400,000 for joint returns. The bill specifies which flood insurance premiums qualify for the deduction, including those under the National Flood Insurance Act and private flood insurance policies.
Expected Effects
The primary effect of this bill would be to reduce the taxable income for individuals who pay flood insurance premiums, potentially lowering their overall tax burden. This could incentivize more homeowners in flood-prone areas to purchase flood insurance. The change would be implemented through amendments to several sections of the Internal Revenue Code.
Potential Benefits
- Provides tax relief to homeowners in flood-prone areas.
- Encourages more individuals to purchase flood insurance, reducing the financial burden on the government in the event of a flood.
- Simplifies the tax filing process for those claiming the deduction by making it an above-the-line deduction.
- Offers financial assistance to those who may struggle to afford flood insurance premiums.
- Could increase property values in flood-prone areas due to reduced cost of ownership.
Most Benefited Areas:
Potential Disadvantages
- Increases complexity of the tax code with new deductions and amendments.
- The income limitation may exclude some higher-income individuals who also face flood risks.
- Potential for increased government debt due to reduced tax revenue.
- May disproportionately benefit homeowners in wealthier areas prone to flooding.
- The deduction may not fully offset the cost of flood insurance for some homeowners.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the general welfare clause of the Constitution (Preamble), as it seeks to provide financial relief to citizens facing flood risks. Article I, Section 8 grants Congress the power to lay and collect taxes, duties, imposts, and excises, implying the authority to create tax deductions. The bill 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).