Bill Overview
Title: Support Ukraine Through Our Tax Code Act
Description: This bill denies the foreign tax credit and the tax deduction for income, war profits, and excess profits taxes paid to Russia and Belarus. The bill also denies certain other tax benefits in connection with the invasion of Ukraine, including any tax treaty benefits and exemptions from withholding requirements. The bill suspends tax information exchanges for Russia and Belarus under a tax treaty or an intergovernmental agreement during the period of the Ukraine invasion.
Sponsors: Rep. Schneider, Bradley Scott [D-IL-10]
Target Audience
Population: Individuals and entities engaged in financial activities with Russia and Belarus
Estimated Size: 2000000
- The legislation explicitly targets taxes and tax-related benefits concerning Russia and Belarus, impacting individuals and corporations engaged in international business or financial activities.
- People or entities based outside the U.S., especially in Russia or Belarus, who deal with U.S. tax regulations through business or personal connections, will be affected.
- Multinational corporations and businesses with cross-border transactions involving Russia or Belarus will experience significant effects, including U.S.-based organizations with foreign income from these countries.
- The legislation aims to economically pressure Russia and Belarus by limiting U.S. tax advantages, impacting individuals or businesses in Russia and Belarus economically.
- The global financial market could indirectly be affected due to changes in international transactions and financial relations involving Russian and Belarussian interests.
Reasoning
- The main impact will be on those engaged in economic activities or transactions linked to Russia or Belarus.
- Individuals outside this specific economic activity bracket are unlikely to notice a difference directly, but may experience indirect effects through economic shifts.
- Large multinational companies will be more accustomed to tax law changes and may adjust more smoothly than individuals or businesses with less international exposure.
- The policy does not carry substantial domestic social services implications, so broader U.S. public services and well-being statistics may see little change.
- The $2,000,000/year starting budget suggests a focused implementation affecting a subset of individuals rather than widespread societal impact.
Simulated Interviews
Tax Consultant (San Francisco, CA)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- This policy complicates the tax filing process for many of my clients.
- There will be an increased demand for our services as businesses and individuals seek to navigate these changes.
- It will lead to higher compliance costs for those involved. Some of my clients may face significant financial strain.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 8 |
International Business Owner (New York, NY)
Age: 39 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 2/20
Statement of Opinion:
- I will have to reconsider business strategies due to the loss of tax benefits.
- It will directly affect our profitability and requires a strategic pivot away from risky markets.
- Our international relations will be strained.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 8 |
| Year 2 | 5 | 8 |
| Year 3 | 6 | 8 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 9 | 9 |
Software Engineer (Seattle, WA)
Age: 30 | Gender: other
Wellbeing Before Policy: 9
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- I'm aware of the changes, but it doesn't seem like it will impact my day-to-day job.
- Our company is large enough to handle these adjustments without affecting us much.
- If anything changes, it would likely be in a minor way.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 9 |
| Year 2 | 8 | 9 |
| Year 3 | 8 | 9 |
| Year 5 | 8 | 9 |
| Year 10 | 8 | 9 |
| Year 20 | 9 | 9 |
Oil and Gas Executive (Houston, TX)
Age: 55 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 1/20
Statement of Opinion:
- It will likely cause us to divest from operations in these regions.
- This policy puts pressure on our foreign engagements, impacting long-term projects.
- We expect substantial restructuring at substantial cost.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 8 |
| Year 2 | 5 | 8 |
| Year 3 | 5 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 9 | 9 |
Retired (Chicago, IL)
Age: 60 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 20/20
Statement of Opinion:
- I don't anticipate any real impact from this policy.
- It seems to target businesses, particularly those engaging with Russia and Belarus.
- I would be more concerned if it affected domestic tax policies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Graduate Student (Boston, MA)
Age: 28 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 15/20
Statement of Opinion:
- I support this policy as a way to limit Russia's economic power.
- As it doesn't impact me financially, I'm viewing it more through a political lens.
- Short-term pain is necessary for long-term strategic gains.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 8 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Financial Analyst (Phoenix, AZ)
Age: 42 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- Our clients will definitely face challenges adapting to this policy.
- It's an opportunity for us, as there's now more need for strategic tax advice.
- Some businesses will have to adjust quickly to avoid losses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Small Business Owner (Miami, FL)
Age: 50 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 2.0 years
Commonness: 10/20
Statement of Opinion:
- I'm worried about ripple effects in the broader European market.
- Direct impact on my business is unlikely, but markets are interconnected.
- It's crucial to stay informed about potential regional policy shifts.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 9 | 9 |
Journalist (Los Angeles, CA)
Age: 34 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 18/20
Statement of Opinion:
- This policy is an interesting development in U.S.-Russia relations.
- I find it fascinating from a policy perspective, but it doesn't affect me personally.
- The broader geopolitical implications are significant.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Farmer (Des Moines, IA)
Age: 65 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 20/20
Statement of Opinion:
- On a personal level, this policy doesn't impact me.
- Curiosity about how it will affect the broader economy is interesting to me.
- I'm more focused on domestic agricultural policies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Cost Estimates
Year 1: $2000000 (Low: $1500000, High: $3000000)
Year 2: $2000000 (Low: $1500000, High: $3000000)
Year 3: $2000000 (Low: $1500000, High: $3000000)
Year 5: $2000000 (Low: $1500000, High: $3000000)
Year 10: $2000000 (Low: $1500000, High: $3000000)
Year 100: $2000000 (Low: $1500000, High: $3000000)
Key Considerations
- The potential for geopolitical tension which might arise from further economic sanctions.
- The administrative burden on the IRS to enforce and monitor compliance with the new tax rules.
- The broader impact on U.S. foreign relations and potential retaliatory measures by Russia or Belarus.
- The real impact of increased tax liabilities on U.S. businesses with operations or investments in Russia and Belarus.