Bill Overview
Title: A bill to amend the Internal Revenue Code of 1986 to extend the time during which a qualified disaster may have occurred for purposes of the special rules for personal casualty losses.
Description: This bill extends through December 31, 2023, the tax relief for individuals and businesses in presidentially-declared disaster areas declared on or after January 1, 2020.
Sponsors: Sen. Cassidy, Bill [R-LA]
Target Audience
Population: People in disaster-declared areas worldwide
Estimated Size: 50000000
- The bill pertains to individuals and businesses in presidentially-declared disaster areas.
- A 'disaster' must be officially declared by the President of the United States for individuals and businesses in that area to qualify for the special tax loss rules.
- The bill extends tax loss relief which potentially benefits both individuals losing personal property and businesses affected by disasters.
- Eligibility is contingent on disaster declarations made from January 1, 2020, to December 31, 2023.
Reasoning
- The policy impacts primarily individuals and businesses in disaster-declared areas, so the sample should include a mix of individuals residing or operating businesses in these areas.
- Given the budget constraints and estimated target population, the policy will only serve a fraction of those impacted. The simulation should reflect varied levels of benefit based on individual circumstances within these areas.
- Wellbeing scores should capture the perceived relief or ongoing hardships despite the policy.
- Some simulations should reflect individuals less directly impacted, such as those who did not face significant losses or have more resilient coping abilities.
- Businesses might have different perspectives than individuals, considering their focus on operational recovery and tax implications.
Simulated Interviews
Small Business Owner (Houston, Texas)
Age: 42 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 15/20
Statement of Opinion:
- The tax relief seems like it will help reduce some of the financial stress from the losses we've suffered.
- I am worried about the sufficiency of the relief, given that we're still in recovery.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 4 |
| Year 10 | 6 | 3 |
| Year 20 | 5 | 2 |
Teacher (Louisiana)
Age: 30 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- I'm hopeful that this tax relief will ease the financial burden of rebuilding my home.
- It's a positive step, but I'm concerned about how much it will cover.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 4 |
| Year 2 | 7 | 3 |
| Year 3 | 6 | 3 |
| Year 5 | 6 | 3 |
| Year 10 | 5 | 2 |
| Year 20 | 5 | 2 |
Software Engineer (California)
Age: 55 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 18/20
Statement of Opinion:
- I appreciate the policy, though I did not face severe losses, it helps with minor repairs.
- I'm more concerned about future fire risk than past losses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Retail Manager (Florida)
Age: 34 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 4.0 years
Commonness: 14/20
Statement of Opinion:
- This relief will be critical to keeping my business afloat.
- It's vital, but the process to claim benefits is cumbersome.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 3 |
| Year 10 | 5 | 3 |
| Year 20 | 4 | 2 |
Retired Farmer (Kansas)
Age: 62 | Gender: male
Wellbeing Before Policy: 3
Duration of Impact: 8.0 years
Commonness: 12/20
Statement of Opinion:
- It's encouraging to know there's some federal aid available to offset losses.
- Hoping this relief can support our recovery and mitigate further financial trouble.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 3 |
| Year 2 | 7 | 3 |
| Year 3 | 6 | 3 |
| Year 5 | 5 | 2 |
| Year 10 | 5 | 2 |
| Year 20 | 4 | 1 |
Freelance Artist (New York)
Age: 28 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 3.0 years
Commonness: 17/20
Statement of Opinion:
- The policy could help recover some equipment costs.
- I worry it might not be enough considering the scope of my losses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 5 | 3 |
| Year 3 | 5 | 3 |
| Year 5 | 5 | 3 |
| Year 10 | 4 | 3 |
| Year 20 | 3 | 2 |
Real Estate Agent (Miami, Florida)
Age: 48 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 2.0 years
Commonness: 18/20
Statement of Opinion:
- This policy might stabilize the market somewhat, relieving some client anxieties.
- It's a good measure, but long-term solutions are necessary.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 5 | 4 |
| Year 5 | 5 | 3 |
| Year 10 | 4 | 3 |
| Year 20 | 3 | 3 |
Non-profit Organizer (Puerto Rico)
Age: 39 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 11/20
Statement of Opinion:
- It's really important for alleviating some community financial strains.
- Hopefully, it makes a noticeable difference in our recovery efforts.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 4 |
| Year 10 | 5 | 3 |
| Year 20 | 4 | 3 |
Agricultural Supplier (Iowa)
Age: 51 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 3.0 years
Commonness: 13/20
Statement of Opinion:
- This tax relief is crucial for logistical recovery and maintaining operations.
- Recovery support like this is necessary, but future policies should be proactive.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 6 | 3 |
| Year 3 | 5 | 3 |
| Year 5 | 5 | 3 |
| Year 10 | 4 | 2 |
| Year 20 | 3 | 1 |
Lumber Mill Owner (Oregon)
Age: 45 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 15/20
Statement of Opinion:
- I see some promise in this bill to recover and stabilize business.
- The relief is essential but perhaps more assistance is still needed.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 4 |
| Year 10 | 6 | 3 |
| Year 20 | 5 | 2 |
Cost Estimates
Year 1: $1200000000 (Low: $1000000000, High: $1500000000)
Year 2: $500000000 (Low: $400000000, High: $600000000)
Year 3: $250000000 (Low: $200000000, High: $300000000)
Year 5: $100000000 (Low: $50000000, High: $150000000)
Year 10: $50000000 (Low: $25000000, High: $75000000)
Year 100: $10000000 (Low: $5000000, High: $15000000)
Key Considerations
- The initial cost is heavily front-loaded in the first year following passage as past disasters are retroactively eligible.
- IRS adjustments and administrative execution may involve additional costs beyond those of direct tax benefits.
- The geographic distribution of impact is uneven, significantly affecting disaster-prone states.
- Understanding the full scale of affected regions and entities aids in an accurate estimate of costs and economic impacts.
- The policy is temporary, expiring by 2023-end, but earlier years' changes impact short-to-mid-term federal budget projections.