From tax reforms to corporate accountability measures, there are several big money bills in Congress that aim to reshape the financial landscape.
Here are seven proposed bills that if passed, have implications for the future of U.S. economic policy — and your wallet.
No Taxes on Tips Act
The idea of “no taxes on tips” has garnered bipartisan interest.
Donald Trump included it as part of his campaign’s economic policies, and Kamala Harris has shown cautious support.
Harris, however, favors adding guardrails such as a $75,000 total income cap and limits on the amount of tips that would be exempt.
Byron Donalds (R-FL) introduced the No Taxes on Tips Act, which aims to eliminate income taxes on cash tips if passed. This legislation would significantly benefit workers who rely on tips for a large portion of their income, such as waitstaff, bartenders, and taxi or ride-share drivers.
No China in Index Funds Act
Brad Sherman (D-CA) and Victoria Spartz (R-IN) introduced the No China in Index Funds Act to limit index funds’ ability to invest in Chinese firms.
Congressman Sherman, who is also a certified accountant, cites the difficulty of assessing the risks of investing in Chinese stocks. Sherman stresses that index funds often invest in all companies within a certain sector with little regard to individual risk.
“It makes no sense to forgo U.S. tax dollars to encourage Americans to invest in China’s economy. It’s also unfair, because China provides tax incentives to Chinese investors but not to those who invest in American stocks,” Sherman says in a related press release. “Finally, we keep Chinese stocks out of index funds, because those funds do no research into the risks these companies pose.”
Social Security Fairness Act of 2023
The Social Security Fairness Act of 2023 aims to eliminate existing rules that reduce retirees’ Social Security benefits if they also receive benefits from other plans, such as pensions from state or federal governments.
It would also abolish the Windfall Elimination Provision, which decreases benefits when a retiree gets a pension from a former employer that did not withhold Social Security taxes.
The bill boasts an impressive 325 co-sponsors in the House of Representatives, indicating strong bipartisan support. The proposed changes were set to go into effect in December 2023, had the bill been passed in time.
However, it is still awaiting action in the House Committee on Ways and Means.
SAFE Banking Act of 2023
The SAFE Banking Act of 2023 outlines protections for regulated financial institutions that provide services to legal marijuana businesses.
When the bill was introduced, marijuana was a Schedule I controlled substance at the federal level, though some states began to legalize it.
It has since been rescheduled as a Class III controlled substance, which reduces restrictions on its production, sale, and use but does not fully legalize it.
Its murky legal status has caused banks to hesitate to offer financial services to businesses dealing in marijuana. In turn, those businesses were forced to find alternatives such as operating as an all-cash business or using cryptocurrencies. This reduced protections for buyers and sellers of marijuana that banks can offer.
Related: DOJ Arrests Telehealth Company Done ADHD’s Top-Ranking Executives
H.R.9279 – Directing the FTC to Address “Shrinkflation”
Representative Ilhan Omar (D-MN) introduced a bill (H.R.9279) to direct the Federal Trade Commission (FTC) to create regulations that provide greater transparency on the recent rise in “shrinkflation.”
Shrinkflation refers to the practice of reducing the size or quantity of a product without reducing its price. In effect, price per ounce increases. Shirnkflation is one of many factors contributing to inflation in recent years.
Consumers may not initially notice the gradual reduction. Removing half an ounce from a bag of Doritos might go unnoticed. However, it allows manufacturers of food, cosmetics, and everyday hygiene products to raise prices in a deceptive, roundabout way.
The bill would require the FTC to mandate increased transparency from companies engaging in this practice.
Related: Kroger-Albertsons Merger Draws FTC Attention
Ending Corporate Bankruptcy Abuse Act of 2024
Representative Emilia Strong Sykes (D-OH) introduced the Ending Corporate Bankruptcy Abuse Act of 2024 to address the alleged misuse of bankruptcy laws by corporations, particularly through Chapter 11 filings.
The bill would allow a Chapter 11 bankruptcy case to be dismissed if it is deemed objectively futile or filed in bad faith.
The bill also seeks to prevent “forum shopping,” where cases are filed in jurisdictions more favorable to the plaintiff’s case.
Sykes referred to corporate bankruptcy abuse as a “Texas Two-Step” maneuver. According to Harvard Law Today, the Texas Two-Step is strategy companies use to avoid liabilities from class-action lawsuits. She emphasizes that the bill aims holds corporations accountable for this actions.
“For too long, greedy corporations have used shady bankruptcy tactics like the Texas Two-Step to avoid compensating innocent Americans they have hurt,” Congresswoman Sykes says in a related press release. “The Ending Corporate Bankruptcy Abuse Act will help prevent this bankruptcy abuse and finally hold corporations accountable for their actions.”
The bill has bipartisan sponsors in Senator Josh Hawley (R-MO) and Senator Richard Durbin (D-IL).
Credit Card Competition Act
The Credit Card Competition Act aims to improve competition among credit and debit card companies by requiring that financial institutions with more than $100 billion in assets add at least two unaffiliated transaction processing networks.
One of these network can be Visa or Mastercard. The other has to be a smaller competitor such as Discover, NYSE, Star, or Shazam.
The bill also forbids credit card issuers to penalize merchants for failing to meet transaction thresholds on their payment networks.
According to a recent lawsuit, Visa and Mastercard control 80% of the credit and debit card industry. The Merchants Payment Coalition estimates that these two companies collected $100.77 billion in transaction fees in 2023.
Big Money Bills, Big Economic Implications
As these seven big money bills continue to move through Congress, their outcomes could have a significant impact on both individual finances and the broader economy.
Keep an eye on how lawmakers navigate these issues, as their decisions could affect wallets across the country.
