S.327 - Hindering Oppressive Nations from Obtaining Revenue Act; HONOR Act (119th Congress)
Summary
The Hindering Oppressive Nations from Obtaining Revenue Act (HONOR Act), or S.327, aims to amend the Internal Revenue Code of 1986 to deny foreign tax credits or deductions for taxes paid to the Russian Federation. This bill, introduced in the Senate, targets Russia by removing certain financial benefits related to tax payments. The intention is to economically pressure Russia.
Expected Effects
The immediate effect would be to increase the tax burden on companies operating in Russia, as they would no longer be able to offset these taxes against their US tax liabilities. This could lead to decreased investment in Russia. The long-term effect could be a reduction in revenue flowing to the Russian government.
Potential Benefits
- Potentially weakens the Russian economy, limiting its ability to fund oppressive activities.
- Aligns US tax policy with foreign policy objectives of countering Russian aggression.
- May encourage companies to reconsider investments in Russia, promoting ethical business practices.
- Could strengthen international alliances by demonstrating US commitment to holding Russia accountable.
- Symbolic value in showing solidarity with countries affected by Russian actions.
Most Benefited Areas:
Potential Disadvantages
- US companies operating in Russia may face increased tax burdens, potentially harming their competitiveness.
- Could lead to retaliatory measures by Russia against US interests.
- May have limited impact on the overall Russian economy if other nations continue to provide tax benefits.
- Potential for unintended consequences on global markets and supply chains.
- The effectiveness of the bill depends on consistent enforcement and international cooperation.
Most Disadvantaged Areas:
Constitutional Alignment
The bill falls under the purview of Congress's power to regulate commerce with foreign nations (Article I, Section 8, Clause 3) and to lay and collect taxes (Article I, Section 8, Clause 1). The bill does not appear to infringe upon any specific constitutional rights or freedoms. The bill's focus on foreign tax credits aligns with the federal government's authority over international relations and economic policy.
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).