09/16/2021 | Press release | Distributed by Public on 09/16/2021 12:45
Washington-Senator Dianne Feinstein (D-Calif.) today applauded the House Ways and Means Committee after it voted yesterday to include several tax provisions that she authored in the reconciliation package:
'I want to thank Chairman Richard Neal and members of the House Ways and Means Committee for including these California priorities in this reconciliation package,' Feinstein said.
'These bills include critical investments in a number of areas, from battling climate change to helping people recover from the COVID-19 pandemic to rebuilding the IRS so it can enforce our country's tax laws.
'I look forward to working with my House and Senate colleagues to ensure these important provisions are included in the final reconciliation package.'
Natural disaster mitigation home improvements
The Ways and Means bill includes Senator Feinstein's Disaster Mitigation and Tax Parity Act. The bipartisan provision would make subsidies that homeowners receive for making natural disaster mitigation improvements to their homes exempt from federal taxes.
Individuals are required to pay federal taxes on state subsidies they receive for making home improvements that protect their homes from natural disasters. These improvements can include removing trees, bushes and other fire-prone vegetation close to homes that contribute to wildfires, strengthening foundations to protect against earthquakes and installing fortified roofs to withstand hurricanes.
'Climate change is forcing homeowners to make improvements to protect their homes from natural disasters like wildfire or hurricanes,' Feinstein said. 'In many states they can receive subsidies for making those necessary improvements. Exempting those subsidies from federal taxes will help more people afford these potentially lifesaving improvements and reduce the cost to respond and rebuild after a disaster strikes.'
Water efficiency home improvement projects
The Ways and Means bill includes key portions of Senator Feinstein's Water Conservation Rebate Tax Parity Act. The provisions would make subsidies that homeowners receive from water utilities for water conservation and water runoff management improvements to their homes exempt from federal taxes.
Water utilities around the country, especially in drought-prone areas like California, are increasingly offering subsidies and incentives to homeowners who make investments to reduce their water use, reduce stormwater runoff and ease the strain on public infrastructure.
'Nearly three-fourths of the western United States is experiencing a severe drought, and the problem will grow worse over time,' Feinstein said. 'We must do more to help homeowners who want to reduce the amount of water they use. Our provision would remove the federal tax liability for water efficiency home improvement subsidies, similar to how we already treat energy efficiency home improvement subsidies.'
Tax credits for used electric vehicles
The Ways and Means bill includes Senator Feinstein's Affordable EVs for Working Families Act to provide buyers of preowned electric cars with tax rebates up to $2,500.
'Our provision would treat used electric vehicles similar to new ones by allowing buyers to receive a tax rebate.Encouraging more used car buyers to choose an electric vehicle will expand the market and help us shift away from polluting gas-powered cars,' Feinstein said.
Tax relief for independent musicians, music production workers
The Ways and Means bill includes Senator Feinstein's Help Independent Tracks Succeed Act. The bipartisan provision would allow musicians, technicians and producers to deduct 100 percent of recording production expenses in the year they are incurred, rather than in later years.
The federal tax code already allows film, television and theater productions to fully deduct production expenses in the year they are incurred, but not music production expenses.
'Musicians and music producers were hit particularly hard by the pandemic because of bans on large gatherings,' Feinstein said. 'This provision would help them recover by allowing them to immediately deduct expenses rather than spread them out over several years.'
Increase IRS funding
The Ways and Means bill includes a provision supported by Senator Feinstein that would increase funding for the Internal Revenue Service. Funding for the agency has decreased by 20 percent since 2010 and its audit rate was dropped by nearly half. As a result, the Treasury Department estimates the IRS will fail to collect $7.5 trillion in taxes owed over the next decade.
'It's becoming increasingly easy for the rich to skirt our tax laws because the IRS simply doesn't have enough cops on the beat,' Feinstein said. 'Rebuilding the IRS will ensure that everyone is paying their fair share.'