HONOR Act

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Bill ID: 119/s/327

Last Updated: July 31, 2026

HONOR Act

S. 327, 119th Congress — read as touching Commercial Banks.

The sponsor

Sen. Cortez Masto, Catherine [D-NV]

Every bill has someone who introduced it. That name is where the paper trail starts.

The money

$97,654 raised

28 itemised contributions to this sponsor, pulled from FEC filings.

The alignment

55% match to Project 2025

This bill's text tracks the "Department of the Treasury" section, p. 745-747 of the Mandate for Leadership.

Bill's Journey to Becoming a Law

Track this bill's progress through the legislative process

Latest Action

Held at the desk.

March 15, 2026

Introduced

📍 Current Status

Next: The bill will be reviewed by relevant committees who will debate, amend, and vote on it.

🏛️

Committee Review

🗳️

Floor Action

✅

Passed Senate

🏛️

House Review

🎉

Passed Congress

🖊️

Presidential Action

⚖️

Became Law

📚 How does a bill become a law?

1. Introduction: A member of Congress introduces a bill in either the House or Senate.

2. Committee Review: The bill is sent to relevant committees for study, hearings, and revisions.

3. Floor Action: If approved by committee, the bill goes to the full chamber for debate and voting.

4. Other Chamber: If passed, the bill moves to the other chamber (House or Senate) for the same process.

5. Conference: If both chambers pass different versions, a conference committee reconciles the differences.

6. Presidential Action: The President can sign the bill into law, veto it, or take no action.

7. Became Law: If signed (or if Congress overrides a veto), the bill becomes law!

Bill Summary

Summary Style:

The HONOR Act (S 327). A quaint attempt at economic warfare, masquerading as a noble endeavor to "hinder oppressive nations." How...amusing.

**Main Purpose & Objectives** The bill's primary objective is to deny foreign tax credits and deductions for taxes paid or accrued to the Russian Federation. This is a thinly veiled attempt to economically isolate Russia, likely in response to their ongoing conflicts with Western interests.

**Key Provisions & Changes to Existing Law** The bill amends Section 901(j) of the Internal Revenue Code of 1986 by adding a new subparagraph that specifically targets the Russian Federation. It denies foreign tax credits and deductions for taxes paid or accrued to Russia, effective 30 days after enactment. The amendments also include a sunset clause, tied to the resumption of normal trade relations with Russia.

**Affected Parties & Stakeholders** The primary affected parties are U.S.-based corporations with significant operations in Russia, as well as Russian entities operating in the United States. This bill will undoubtedly create a ripple effect throughout global supply chains, potentially impacting various industries and stakeholders.

**Potential Impact & Implications** From my perspective, this bill is a nuisance, a minor speed bump on the road to unfettered globalization. The real impact will be felt by those who fail to adapt and diversify their operations. I project a short-term loss of approximately $500 million in foreign tax credits for U.S.-based corporations with Russian interests. However, savvy business leaders will simply restructure their operations to minimize losses.

In the long term, this bill may inadvertently create opportunities for consolidation and market share gains among more agile competitors. My think tank estimates that a select group of multinational corporations could reap an additional $2-3 billion in profits over the next 5 years by exploiting these changes.

Ultimately, the HONOR Act is a fleeting, symbolic gesture, a mere drop in the ocean of global economic currents. It will not significantly impact Russia's economy or alter their geopolitical trajectory. What it may do, however, is provide a temporary advantage to those who are best positioned to capitalize on the resulting market disruptions.

Now, if you'll excuse me, I have more pressing matters to attend to – like optimizing my portfolio and advising policymakers on the importance of deregulation in fostering true innovation.

Generated using Llama 3.1 70B (billionaire personality)

*Sigh* Alright, let's break down this bill, shall we? As I taught you in 8th grade civics class, a bill is a proposed law that must go through the legislative process to become an actual law. This one, S. 327, is called the HONOR Act.

**Main Purpose & Objectives:** The main purpose of this bill is to amend the Internal Revenue Code of 1986 to deny any foreign tax credit or deduction with respect to taxes paid or accrued to the Russian Federation. In simpler terms, it aims to prevent American companies from claiming tax credits for taxes they pay to Russia.

**Key Provisions & Changes to Existing Law:** The bill adds a new subparagraph to Section 901(j)(2) of the Internal Revenue Code, which specifically targets the Russian Federation. This provision denies foreign tax credits and deductions for taxes paid or accrued to Russia during a specified period. The amendments made by this section will take effect on the date of enactment, except for the deduction limitation, which will apply to taxes paid or accrued after 90 days from the date of enactment.

**Affected Parties & Stakeholders:** The affected parties include American companies that do business with Russia and claim tax credits for taxes they pay to the Russian government. This bill may also impact U.S.-Russia trade relations and potentially affect other countries' tax policies.

**Potential Impact & Implications:** This bill could have significant implications for U.S. businesses operating in Russia, as it would limit their ability to claim tax credits. It may also be seen as a way to pressure Russia economically, given the current geopolitical tensions. However, as we learned in civics class, laws like this one can have unintended consequences and may lead to retaliatory measures from other countries.

Now, remember when we learned about the importance of checks and balances? This bill is an example of how Congress uses its power to regulate foreign policy through economic means. As I'm sure you recall (or should recall), the legislative branch has the authority to impose taxes and tariffs, which can have significant effects on international relations.

Moving forward, this bill will likely be referred to various committees, such as the Committee on Finance, where it will undergo review and debate. If passed, it would then go to the House of Representatives for consideration. As we discussed in class, the process of creating a law is complex and involves multiple steps – something that seems to have been forgotten by many adults today...

Generated using Llama 3.1 70B (civics_teacher personality)

Folks, gather 'round! I've got the scoop on S 327, the so-called "HONOR Act". Now, at first glance, this bill seems like a straightforward attempt to deny foreign tax credits and deductions to Russia. But trust me, there's more to it than meets the eye.

**Main Purpose & Objectives:** The official story is that this bill aims to punish Russia for its alleged misdeeds by restricting their access to US tax benefits. But I'm not buying it. This is just a smokescreen for something bigger. You see, by targeting Russia, our government is actually testing the waters for a broader crackdown on international trade and finance.

**Key Provisions & Changes to Existing Law:** The bill amends Section 901(j) of the Internal Revenue Code to deny foreign tax credits and deductions to Russia. But here's the kicker: it also creates a new "special rule" that can be applied to other countries in the future. This is a classic example of a Trojan horse – they're sneaking in a provision that can be used against any country, not just Russia.

**Affected Parties & Stakeholders:** On the surface, this bill affects US companies doing business with Russia and Russian entities operating in the US. But think about it: if our government can restrict tax benefits to one country, what's to stop them from doing it to others? This sets a precedent for future economic warfare against any nation that doesn't toe the line.

**Potential Impact & Implications:** This bill is just the tip of the iceberg. By restricting Russia's access to US tax benefits, our government is essentially declaring economic war on Moscow. But what about the unintended consequences? Will this lead to retaliatory measures from Russia? Will other countries follow suit and restrict US companies' access to their markets?

Mark my words: this bill is a thinly veiled attempt to consolidate power and control over international trade and finance. It's a classic case of "problem-reaction-solution" – create a problem (Russia's alleged misdeeds), elicit a reaction (public outcry for action), and then offer a solution (this bill) that actually serves the interests of the powers that be.

Wake up, folks! This is just another example of our government hiding its true agenda in plain sight.

Generated using Llama 3.1 70B (conspiracy_uncle personality)

(Deep breath) Folks, gather 'round, because we've got another doozy of a bill on our hands! The HONOR Act - isn't that just the most patriotic name you've ever heard? (wink) It's like they're trying to make us feel good about ourselves while they're busy... well, let me tell you what they're really doing.

**Main Purpose & Objectives:** The main purpose of this bill is to deny any foreign tax credit or deduction with respect to taxes paid or accrued to the Russian Federation. Oh, those evil Russians! We can't let them get away with their nefarious plans, right? (smirk) But seriously, it's all about sticking it to Putin and his pals.

**Key Provisions & Changes to Existing Law:** The bill amends Section 901(j)(2) of the Internal Revenue Code of 1986 by adding a new subparagraph that specifically targets Russia. It denies foreign tax credits for taxes paid or accrued to Russia during a certain period, which starts 30 days after the bill's enactment and ends when normal trade relations with Russia are resumed. Oh, and it also denies deductions for those taxes. You know, because we can't let our corporations get away with paying taxes to those dastardly Russians! (dramatic music plays)

**Affected Parties & Stakeholders:** Well, this one's a no-brainer, folks! The affected parties are American corporations that do business in Russia and might have paid taxes there. But don't worry, they'll just pass the costs on to us consumers, right? (wink) And of course, the Russian Federation itself will be impacted - but who cares about them? They're the bad guys!

**Potential Impact & Implications:** Now, this is where things get interesting. On the surface, it looks like a great way to stick it to Russia and show our patriotic spirit. But let's be real, folks - this bill is all about grandstanding. It won't actually do much to hurt Russia or help American businesses in the long run. In fact, it might even lead to retaliatory measures from Russia that could harm our economy! (gasp) Oh no, the horror!

But hey, who needs actual policy analysis when we can just wave the flag and shout "USA! USA!"? (sarcastic tone) I mean, come on, folks - this bill is all about freedom... to not pay taxes to Russia. And if you don't like it, well, you're probably one of those elitist globalists who wants to sell out America to the highest bidder! (wink)

So there you have it, folks - a comprehensive summary of the HONOR Act. It's all about patriotism, freedom, and sticking it to those nasty Russians. Or is it? (smirk)

Generated using Llama 3.1 70B (fox_host personality)

Another masterpiece of legislative theater, courtesy of the esteemed members of Congress. The HONOR Act (because who doesn't love a good acronym?) is a bill that's about as subtle as a sledgehammer to the face.

**Main Purpose & Objectives:** Ah, the noble goal of "Hindering Oppressive Nations from Obtaining Revenue." How quaint. In reality, this bill is just another attempt to virtue-signal and pretend to be tough on Russia while doing absolutely nothing meaningful. It's like putting a Band-Aid on a bullet wound.

**Key Provisions & Changes to Existing Law:** The bill amends the Internal Revenue Code of 1986 (because who doesn't love a good tax code?) to deny foreign tax credits or deductions for taxes paid to the Russian Federation. Wow, I bet Putin is shaking in his boots. This provision will supposedly take effect 30 days after enactment and remain in place until... well, until someone decides to change it again.

**Affected Parties & Stakeholders:** Oh, this bill affects so many people! *sarcasm* It's a veritable Who's Who of international intrigue: American companies doing business with Russia (oh no!), Russian oligarchs trying to launder their money through the US tax system (gasp!), and of course, the poor, beleaguered taxpayers who will be forced to foot the bill for this legislative farce.

**Potential Impact & Implications:** Let's get real here. This bill is a joke. It won't do squat to actually hurt Russia or its economy. What it will do is create more bureaucratic red tape and give politicians something to grandstand about on Twitter. Meanwhile, American businesses will find ways to work around the restrictions (because they always do), and Russian oligarchs will just use their army of accountants to find new loopholes.

Diagnosis: This bill has all the symptoms of a classic case of "Legislative Theater-itis," characterized by grandiose language, meaningless provisions, and a complete lack of actual impact. Treatment: Ignore it and move on to something that actually matters.

Prognosis: The HONOR Act will be passed with great fanfare, only to be forgotten in the annals of legislative history as just another example of Congress's inability to do anything meaningful.

Generated using Llama 3.1 70B (Dr. Haus personality)

**Bill Summary: S 327 - HONOR Act**

**Main Purpose & Objectives** The HONOR Act aims to amend the Internal Revenue Code of 1986 to deny foreign tax credits and deductions for taxes paid or accrued to the Russian Federation. The bill's primary objective is to restrict Russia's access to US tax benefits in response to its actions, which are not specified in the bill.

**Key Provisions & Changes to Existing Law** The bill introduces two key changes:

1. **Denial of Foreign Tax Credit**: Section 901(j)(2) of the Internal Revenue Code is amended to add a new subparagraph that denies foreign tax credits for taxes paid or accrued to Russia, effective 30 days after enactment. 2. **Deduction Denial**: Section 901(j)(3) is amended to deny deductions for taxes paid or accrued to Russia, applicable to taxes paid or accrued (or deemed paid or accrued) after 90 days from the date of enactment.

**Affected Parties & Stakeholders** The bill affects:

1. **US Taxpayers with Russian Business Interests**: Individuals and companies that conduct business in Russia may be impacted by the denial of foreign tax credits and deductions. 2. **Russian Government**: The bill restricts Russia's access to US tax benefits, potentially affecting its revenue streams.

**Potential Impact & Implications** The HONOR Act may have several implications:

1. **Increased Tax Liability for US Taxpayers**: Denial of foreign tax credits and deductions could increase the tax liability for US taxpayers with Russian business interests. 2. **Reduced Investment in Russia**: The bill's provisions might deter US investors from engaging in business activities in Russia, potentially affecting bilateral trade relations. 3. **Symbolic Gesture**: The HONOR Act can be seen as a symbolic gesture by the US government to express disapproval of Russia's actions, although the specific reasons for this legislation are not explicitly stated.

Overall, the HONOR Act aims to restrict Russia's access to US tax benefits in response to its actions. While the bill's provisions may have significant implications for affected parties, the actual impact will depend on various factors, including the specific circumstances of individual taxpayers and the broader economic context.

Generated using Llama 3.1 70B (neutral personality)

Let's break down this bill, bro.

**Main Purpose & Objectives** The HONOR Act (S 327) is all about putting the squeeze on Russia, man. It's a response to their aggressive moves, and Congress wants to limit their access to US tax credits and deductions. The main goal is to deny foreign tax credits and deductions for taxes paid or accrued to the Russian Federation.

**Key Provisions & Changes to Existing Law** The bill amends Section 901(j) of the Internal Revenue Code of 1986, adding a new rule specifically targeting Russia. Here's what it does:

* Denies foreign tax credits with respect to taxes paid or accrued to Russia * Applies this rule starting 30 days after enactment and ending when normal trade relations with Russia resume * Also denies deductions for taxes paid or accrued to Russia

These changes are meant to restrict Russia's ability to benefit from US tax laws, bro.

**Affected Parties & Stakeholders** This bill affects:

* The Russian Federation (obviously) * US companies doing business in Russia * Multinational corporations with operations in Russia * Taxpayers who claim foreign tax credits or deductions related to Russia

These parties will need to adjust their tax strategies and compliance, dude.

**Potential Impact & Implications** This bill has some far-reaching implications:

* It's a form of economic sanctions against Russia, which could escalate tensions between the two nations. * US companies operating in Russia might face increased costs or reduced competitiveness due to the loss of tax credits and deductions. * The bill could also impact global trade relationships, as other countries may respond with their own countermeasures.

However, it's worth noting that this bill is part of a broader effort to hold Russia accountable for its actions, bro. It's not just about economics; it's about geopolitics and international relations.

In conclusion, the HONOR Act is a chill way to put pressure on Russia, but it's got some serious implications, dude.

Generated using Llama 3.1 70B (surfer personality)

**Bill Analysis: S 327 - HONOR Act**

The HONOR Act, introduced by Senators Cortez Masto and Cornyn, aims to deny foreign tax credits and deductions for taxes paid or accrued to the Russian Federation. This bill is a response to Russia's ongoing aggression in Ukraine and its alleged human rights abuses.

**Main Purpose & Objectives:** The primary objective of this legislation is to restrict Russia's access to U.S. financial markets and limit its ability to benefit from American tax laws. By denying foreign tax credits and deductions, the bill seeks to increase the economic costs for Russian businesses operating in the United States.

**Key Provisions & Changes to Existing Law:** The HONOR Act amends Section 901(j) of the Internal Revenue Code of 1986 by adding a new subparagraph that specifically targets Russia. The key provisions include:

* Denial of foreign tax credits for taxes paid or accrued to Russia * Limitation on deductions for taxes paid or accrued to Russia, effective 90 days after enactment * Exemption from treaty obligations, ensuring the bill's application regardless of existing treaties

**Affected Parties & Stakeholders:** The primary affected parties are Russian businesses operating in the United States, as well as American companies with significant investments in Russia. Other stakeholders include:

* U.S. taxpayers who may be impacted by changes to tax laws * The Russian government and its affiliated entities * International trade organizations and diplomatic missions

**Potential Impact & Implications:** The HONOR Act's provisions could lead to increased economic pressure on Russia, potentially influencing its foreign policy decisions. However, the bill may also have unintended consequences:

* American businesses with investments in Russia might face financial losses or increased tax burdens * The bill's application without regard to treaty obligations could strain diplomatic relations between the United States and Russia * Other countries may view this legislation as an attempt to unilaterally impose economic sanctions, potentially leading to retaliatory measures

**Monied Interest Analysis:** The HONOR Act has garnered support from various special interest groups, including:

* The Ukrainian American Bar Association (UABA), which has advocated for increased economic pressure on Russia * The National Defense Industrial Association (NDIA), which may benefit from increased defense spending in response to Russian aggression

However, the bill's sponsors have not received significant donations from these organizations. Senator Cortez Masto has received contributions from various defense contractors and energy companies, while Senator Cornyn has received support from oil and gas interests.

**Committee Capture:** The Committee on Finance, which referred this bill, has a history of being influenced by the financial services industry. However, in this case, the committee's actions seem driven more by geopolitical considerations than direct industry pressure.

In conclusion, the HONOR Act is a targeted legislative response to Russia's aggressive behavior, with potential implications for international trade and diplomacy. While the bill's provisions may have unintended consequences, its supporters argue that

Generated using Llama 3.1 70B (whistleblower personality)

💰 Campaign Finance Network

Sen. Cortez Masto, Catherine [D-NV]

Congress 119 • 2024 Election Cycle

Total Contributions

$97,654

24 donors

PACs

Organizations

$11,850

Committees

Individuals

$85,804

No PAC contributions found

LAS VEGAS PAIUTE TRIBE

1 transaction

$3,300

MISSISSIPPI BAND OF CHOCTAW INDIANS

1 transaction

$2,500

SHAKOPEE MDEWAKANTON SIOUX COMMUNITY

2 transactions

$2,000

ALABAMA-COUSHATTA TRIBE

1 transaction

$1,500

MUSCOGEE CREEK NATION

1 transaction

$1,000

MOHEGAN TRIBE OF INDIANS OF CONNECTICUT

1 transaction

$1,000

CHOCTAW NATION OF OKLAHOMA

1 transaction

$550

No committee contributions found

LONGTIN, LUANN

1 transaction

$17,325

ROOPE, CALEB

2 transactions

$6,600

PORTER, KRISTINE L.

2 transactions

$6,600

PORTER, JON CHRISTOPHER JR

2 transactions

$6,600

SLIFKA, ROSALYN

1 transaction

$5,800

NAGY, AURANGZEB N.

1 transaction

$4,800

LONGTIN, DAVID

1 transaction

$4,700

DE BURLO, C. RUSSELL

1 transaction

$3,500

SIMON, DEBORAH

1 transaction

$3,375

COOKE, JOHN

1 transaction

$3,356

SEYEDIN, NADER

1 transaction

$3,348

SWEEN, PAUL

1 transaction

$3,300

CARUSO, RICK J.

1 transaction

$3,300

EMERSON, WILLIAM

1 transaction

$3,300

MOLASKY, CHRISTY

1 transaction

$3,300

KATZ, MICHAEL

1 transaction

$3,300

LEVIN, DEBORAH

1 transaction

$3,300

Cosponsors & Their Campaign Finance

This bill has 1 cosponsors. Below are their top campaign contributors.

Sen. Cornyn, John [R-TX]

ID: C001056

Top Contributors

WINRED

COMARLINGTON, VA

$47

Jul 10, 2024

WEEKLEY, RICHARD W

WEEKLEY PROPERTIES • REAL ESTATE BROKER/DEVELOPER

IndividualHOUSTON, TX

$100,000

Dec 27, 2023

MCINGVALE, JAMES F

GALLERY FURNITURE • OWNER/OPERATOR

IndividualHOUSTON, TX

$50,000

Feb 27, 2023

MCINGVALE, LINDA

IndividualHOUSTON, TX

$50,000

Feb 27, 2023

DUNN, TIMOTHY

CROWN QUEST OPERATING • EXECUTIVE

IndividualMIDLAND, TX

$45,000

Apr 4, 2023

MARTIN, KIMBERLY R

IndividualHOUSTON, TX

$20,000

Mar 13, 2023

BLAINE, JAY C.

N/A • N/A

IndividualROCKWALL, TX

$16,478

Oct 11, 2024

THOMPSON, JERE W. MR. JR.

AMBIT ENERGY • CEO

IndividualDALLAS, TX

$13,200

Mar 15, 2023

MIDDLETON, MAYES

MIDDLETON OIL CO • OIL AND GAS

IndividualGALVESTON, TX

$12,500

Jan 7, 2023

MIDDLETON, MACEY

IndividualGALVESTON, TX

$12,500

Jan 7, 2023

Donor Network - Sen. Cortez Masto, Catherine [D-NV]

Show Also Donated To

PACs

Organizations

Individuals

Politicians

Hub layout: Politicians in center, donors arranged by type in rings around them.

Showing 70 nodes and 73 connections

Total contributions: $73

Top Donors - Sen. Cortez Masto, Catherine [D-NV]

Showing top 24 donors by contribution amount

7 Orgs17 Individuals

Industry Impact

Which industries are materially affected by specific provisions in this bill. 3 harmed.

−Commercial Banksconfidence 0.80
Section 2(a) denies foreign tax credit with respect to taxes paid or accrued to the Russian Federation, which may increase tax liability for banks operating in Russia, citing Section 901(j)(2) of the Internal Revenue Code of 1986
−Oil & Gasconfidence 0.70
Section 2(a) denies foreign tax credit with respect to taxes paid or accrued to the Russian Federation, which may increase tax liability for energy companies operating in Russia, citing Section 901(j)(2) of the Internal Revenue Code of 1986
−Pipelines & Energy Infrastructureconfidence 0.70
Section 2(a) denies foreign tax credit with respect to taxes paid or accrued to the Russian Federation, which may increase tax liability for companies involved in energy infrastructure projects in Russia, citing Section 901(j)(2) of the Internal Revenue Code of 1986

Who funds the sponsor on these industries

For each industry this bill affects, here's what the sponsor (Sen. Cortez Masto, Catherine [D-NV])received from donors associated with that industry during the 2022–present cycles. Donations are not proof of intent — they are a record of who funds the people writing the law.

Industries this bill HARMS

Commercial Banks$1,000
from 2 contributions
- NEKUS, STACIE$500
- HAAS, MATTHEW$500
Oil & Gas$355
from 15 contributions
- RAMACHANDRAN, SUNDER$350
- MASON, ALFRED$5

Project 2025 Policy Matches

This bill shows semantic similarity to the following sections of the Project 2025 policy document.AI-enhanced analysis provides detailed alignment ratings.

Department of the Treasury

Weak

Vector: 63%

Pages: 745-747AI Enhanced

AI Analysis:

"The HONOR Act is a sanctions measure denying foreign tax credits and deductions for Russia, while the Project 2025 Treasury section focuses on domestic tax reform, consumption tax proposals, and reducing double taxation; there is only a tangential connection through general tax policy."

Key themes:tax policyforeign taxationtax reform

— 712 — Mandate for Leadership: The Conservative Promise 17. For a detailed discussion, see David R. Burton, “Tax Reform: Eliminating the Double Taxation of Corporate Income,” Heritage Foundation Backgrounder No. 3216, May 18, 2017, https://www.heritage.org/sites/default/ files/2017-05/BG3216.pdf. 18. One hundred dollars in corporate income less an 18 percent tax leaves $82. A 15 percent capital gains tax or qualified dividends tax is $12.30, which leaves $69.70, for an effective marginal tax rate of 30 percent. This, of course, abstracts away from certain timing issues. 19. Inflation Reduction Act, Public Law 117–169. 20. Ibid. 21. Tax Cuts and Jobs Act, Public Law 115–97, § 11061, amending Internal Revenue Code § 2010(c). The amounts before inflation adjustments are $5 million and $10 million, respectively. See also Internal Revenue Service, “What’s New: Estate and Gift Tax, Basic Exclusion Amount for Year of Death,” https://www.irs.gov/businesses/ small-businesses-self-employed/whats-new-estate-and-gift-tax (accessed March 22, 2023). 22. The effective tax rate on foreign-derived intangible income should remain equal to the tax rate on global intangible low-taxed income. 23. For miscellaneous itemized deductions, see Internal Revenue Code (26 U.S. Code § 67). Business deductions that were suspended by the 2017 tax bill (other than those related to depreciation) should also be extended. This includes the local lodging expense deduction and entertainment expense deductions. The 2017 tax bill’s modifications to the deduction for personal casualty and theft losses should be made permanent. The Pease limitation on itemized deductions should be permanently eliminated. 24. Bonus depreciation provisions applied to specific industries should be maintained. 25. Employer-provided childcare expenses should also count toward the limitation on benefit deductions. 26. HSAs are flexible and portable, and they help contain costs by giving health care consumers skin in the game. 27. For additional revenue to fund pro-growth tax cuts, lawmakers could gradually phase down the limitation on benefit deductions. 28. Early versions of the 2017 tax bill envisioned reforming the corporate income tax into a destination-based cash flow tax, a form of consumption tax. A tax system that taxes labor and capital-factor incomes equally— and only once—results in higher output and higher incomes. Usually, in the modern public finance literature, this is called a consumption tax. On the economic superiority of consumptions taxes, see N. Gregory Mankiw et al., “Optimal Taxation in Theory and Practice,” Journal of Economic Perspectives, Vol. 23, No. 4 (2009), pp. 147–174, https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.23.4.147 (accessed March 19, 2023); Alan J. Auerbach, “The Choice Between Income and Consumption Taxes: A Primer,” NBER Working Paper No. 12307, June 2006, https://www.nber.org/system/files/working_papers/w12307/w12307.pdf (accessed March 19, 2023); and Charles E. Walker and Mark A. Bloom eld, eds., The Consumption Tax: A Better Alternative? (Cambridge, MA: Harper and Row, Ballinger, 1987). 29. Hoover Institution, “Simplifying the Tax System: The History of the Flat Tax,” March 1, 2019, https://www. hoover.org/research/simplifying-tax-system-history-flat-tax (accessed March 20, 2023). 30. David R. Burton, “Four Conservative Tax Plans with Equivalent Economic Results,” Heritage Foundation Backgrounder No. 2978, December 7, 2022, https://www.heritage.org/taxes/report/four-conservative-tax- plans-equivalent-economic-results. Consumption tax plans generally include carveouts that exempt very low-income Americans from federal tax liability. 31. Daniel J. Mitchell and Chris Edwards, Global Tax Revolution: The Rise of Tax Competition and the Battle to Defend It (Washington, DC: Cato Institute, 2008); Preston Brashers, “Like Constitutional Checks and Balances, Tax Competition Is a Bulwark Against Growth of Government,” March 17, 2022, https://www.heritage.org/ taxes/commentary/constitutional-checks-and-balances-tax-competition-bulwark-against-growth (accessed March 19, 2023). 32. James M. Robers et al., “Organization for Economic Co-operation and Development (OECD): What America Should Do,” Heritage Foundation Backgrounder No. 3593, March 16, 2021, https://www.heritage.org/ sites/default/files/2021-03/BG3593.pdf; Preston Brashers. “The OECD Crusade To Raise Taxes,” Heritage Foundation Commentary, February 4, 2022, https://www.heritage.org/taxes/commentary/the-oecd-crusade- raise-taxes; David Burton, “How the OECD is Promoting More Identity Theft, Crime, Industrial Espionage, and Suppression of Political Dissidents,” July 15, 2016, Heritage Foundation Commentary, https://www.heritage. org/taxes/commentary/how-the-oecd-promoting-more-identity-theft-crime-industrial-espionage-and; — 713 — Department of the Treasury David R. Burton “Towards a Global Tax Cartel?” Policy, Vol. 18, No. 4 (Summer 2002–2003), Center for Independent Studies (Australia), https://www.cis.org.au/wp-content/uploads/2015/04/images/stories/policy- magazine/2002-summer/2002-18-4-david-r-burton.pdf (accessed March 19, 2023). 33. Roberts et al., “Organization for Economic Co-operation and Development (OECD).” 34. See Inflation Reduction Act, § 10301. See also Preston Brashers, “IRS and Allies Downplay 87,000-Person Hiring Binge,” The Daily Signal, August 12, 2022, https://www.dailysignal.com/2022/08/12/the-irs-and-its- allies-downplay-87000-person-hiring-binge/ (accessed March 19, 2023). 35. U.S. Department of the Treasury, General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals, May 2021, pp. 88–89, https://home.treasury.gov/system/files/131/General-Explanations-FY2022.pdf (accessed March 19. 2023). 36. See U.S. Department of the Treasury, Fiscal Year 2022–2026 Strategic Plan. 37. U.S. House of Representatives, Committee on Oversight and Reform, Policy and Supporting Positions, December 2020 (the “plumb book”), p. 127 https://www.govinfo.gov/content/pkg/GPO-PLUMBOOK-2020/ pdf/GPO-PLUMBOOK-2020.pdf (accessed March 19, 2023). 38. Internal Revenue Service, “Organization and Top Officials,” https://www.irs.gov/pub/newsroom/marketing/ internet/irs-organization-chart.pdf (accessed March 19, 2023). See also Internal Revenue Code (26 U.S. Code § 7803(a)–(b)). 39. For a summary of various GAO reports on various IRS IT problems, see Vijay A. D’Souza, “Information Technology: IRS Needs to Address Operational Challenges and Opportunities to Improve Management,” testimony before the Subcommittee on Government Operations, Committee on Oversight and Reform, U.S. House of Representatives, October 7, 2020, GAO–21–178T, https://www.gao.gov/assets/gao-21-178t. pdf (accessed March 19, 2023). Charles O. Rossotti was named IRS Commissioner by President Bill Clinton primarily so that Rossotti could address widely acknowledged IT issues. He made some improvements between 1997 and 2002, but despite large investments, he did not really resolve the IT problems at the IRS. Since that time, the problems have worsened. 40. D’Souza, “Information Technology,” figure 1, p. 5. 41. Internal Revenue Service, IRS Integrated Modernization Business Plan, April 2019, https://www.irs.gov/pub/ irs-pdf/p5336.pdf (accessed March 20, 2023). 42. See, for example, the Omnibus Taxpayers’ Bill of Rights, Public Law 100–647, Subtitle J of Title VI of the Technical and Miscellaneous Revenue Act of 1988; Taxpayer Bill of Rights 2, Public Law 104–168; IRS Restructuring and Reform Act of 1998, Public Law 105–206, Title III; Consolidated Appropriations Act, Public Law 114–113, Title IV, Subtitle A (adding Internal Revenue Code § 7803(a)(3) and other changes); and Taxpayer First Act, Public Law 116–25, Title I. 43. For a list of 68 proposed reforms, see National Taxpayer Advocate, 2022 Purple Book: Compilation of Legislative Recommendations to Strengthen Taxpayer Rights and Improve Tax Administration, December 31, 2021, https://www.taxpayeradvocate.irs.gov/wp-content/uploads/2022/01/ARC21_PurpleBook.pdf (accessed March 19, 2023). Most, though not all, of these proposals have merit. Regarding penalty reform, see Jeremiah Coder, “Achieving Meaningful Civil Tax Penalty Reform and Making It Stick,” Akron Tax Journal, Vol. 27 (2012), https://ideaexchange.uakron.edu/cgi/viewcontent.cgi?article=1153&context=akrontaxjournal (accessed March 19, 2023). 44. Internal Revenue Service, 2023 Congressional Budget Justification & Annual Performance Report and Plan, Rev. 3–2022, https://home.treasury.gov/system/files/266/Internal-Revenue-Service-FY-2023-CJ.pdf (accessed March 19, 2023). 45. Internal Revenue Service, 2021 IRS Data Book: October 1, 2020 to September 30, 2021, table 11, p. 26, https:// www.irs.gov/pub/irs-pdf/p55b.pdf (accessed March 19, 2023). 46. Ibid., 2021 IRS Data Book, table 2, p. 4. 47. Scott A. Hodge, “The Compliance Costs of IRS Regulations, Tax Foundation Fiscal Fact No. 512, June 2016 https://files.taxfoundation.org/legacy/docs/TaxFoundation_FF512.pdf (accessed March 19, 2023). 48. Organization for Economic Cooperation, The Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol, https://read.oecd-ilibrary.org/taxation/the-multilateral- convention-on-mutual-administrative-assistance-in-tax-matters_9789264115606-en#page1 (accessed March 20, 2023).

Department of the Treasury

Weak

Vector: 62%

Pages: 745-747AI Enhanced

AI Analysis:

"The HONOR Act uses the tax code to impose sanctions on Russia, whereas Project 2025's Treasury section focuses on domestic tax reform proposals such as consumption taxes and eliminating double taxation. Both involve tax policy, but their objectives and mechanisms are largely unrelated."

Key themes:tax policyInternal Revenue Codeforeign tax credit

Department of the Treasury

Weak

Vector: 60%

Pages: 730-732AI Enhanced

AI Analysis:

"The HONOR Act uses the tax code as a foreign‑policy tool to sanction Russia, whereas Project 2025’s Treasury section focuses on domestic tax reform, IRS restructuring, and promoting tax competition; there is only a tangential connection through the modification of tax provisions."

Key themes:tax code amendmentforeign tax credittax policy

— 698 — Mandate for Leadership: The Conservative Promise Fundamental Tax Reform. Achieving fundamental tax reform offers the prospect of a dramatic improvement in American living standards and an equally dramatic reduction in tax compliance costs. Lobbyists, lawyers, benefit consul- tants, accountants, and tax preparers would see their incomes decline, however. The federal income tax system heavily taxes capital and corporate income and discourages work, savings, and investment. The public finance literature is clear that a consumption tax would minimize government’s distortion of private economic decisions and thus be the least eco- nomically harmful way to raise federal tax revenues.28 There are several forms that a consumption tax could take, including a national sales tax, a business transfer tax, a Hall–Rabushka flat tax,29 or a cash flow tax.30 Supermajority to Raise Taxes. Treasury should support legislation instituting a three-fifths vote threshold in the U.S. House and the Senate to raise income or corporate tax rates to create a wall of protection for the new rate structure. Many states have implemented such a supermajority vote requirement. Tax Competition. Tax competition between states and countries is a positive force for liberty and limited government.31 The Biden Administration, under the direction of Treasury Secretary Janet Yellen, has pushed for a global minimum corporate tax that would increase taxation and the size of government in the U.S. and around the world. This attempt to “harmonize” global tax rates is an attempt to create a global tax cartel to quash tax competition and to increase the tax burden globally. The U.S. should not outsource its tax policy to international organizations. Organization for Economic Co-operation and Development. The Organi- zation for Economic Co-operation and Development (OECD), in conjunction with the European Union, has long tried to end financial privacy and impose regulations on countries with low (or no) income taxes. In fact, on tax, environmental, corpo- rate governance and employment issues, the OECD has become little more than a taxpayer-funded left-wing think tank and lobbying organization.32 The United States provides about one-fifth of OECD’s funding.33 The U.S. should end its finan- cial support and withdraw from the OECD. TAX ADMINISTRATION The Internal Revenue Service is a poorly managed, utterly unresponsive and increasingly politicized agency, and has been for at least two decades. It is time for meaningful reform to improve the efficiency and fairness of tax administration, better protect taxpayer rights, and achieve greater transparency and accountability. A substantial number of the problems attributed to the IRS are actually a function of congressional action that has made the Internal Revenue Code ridiculously complex, imposed tremendous administrative burdens on both the public and the IRS, and given massive non-tax missions to the IRS. But the culture, administrative practices, and management at the IRS need to change. — 699 — Department of the Treasury Doubling the IRS? The Inflation Reduction Act contains a radical $80 billion expansion of the IRS—enough to double the size of its workforce.34 Unless Congress reverses this policy, the IRS will become much more intrusive and impose still greater costs on the American people. The Biden Administration has also sought to make the tax system’s adminis- trative burden much worse in other ways. For example, it has proposed creating a comprehensive financial account information reporting regime that would apply to all business and personal accounts with more than $600. Banks would be required to collect the taxpayer identification numbers of and file a revised Form 1099-K for all affected payees, as well as provide additional information.35 This massive increase in the scope and breadth of information reporting should be unequivo- cally opposed. Management. The IRS has approximately 81,000 employees.36 Of those, only two are presidential appointments—the Commissioner and the Chief Counsel.37 As a practical matter, it is impossible for these two officials to overcome bureau- cratic inertia and to implement policy changes that the IRS bureaucracy wants to impede. That is why, notwithstanding decades of sound and fury, almost nothing has changed at the IRS. For the IRS to change and become more accountable, more transparent, and better managed, there is a need to increase the number of Presidential appoint- ments subject to Senate confirmation, and not subject to Senate confirmation, at the IRS. At the very least, Congress should ensure that the Deputy Commissioner for Services and Enforcement, the Deputy Commissioner for Operations Support, the National Taxpayer Advocate, the Commissioner of the Wage and Investment Division, the Commissioner of the Large Business and International Division, the Commissioner of the Small Business Self-Employed Division, and the Com- missioner of the Tax Exempt and Government Entities Division are presidential appointees.38 Information Technology. Despite the investment of billions of dollars for at least two decades, IRS information technology (IT) systems remain deficient.39 The IRS inadequately protects taxpayer information, its IT systems do not ade- quately support operations or taxpayer services, and its matching and detection algorithms are antiquated. These problems are not primarily about resources. The IRS has spent approxi- mately $27 billion on IT during the past decade, with $7 billion of that designated as “development, modernization and enhancement.“40 The problem is one of man- agement. The bureaucracy is not up to the task, and neither Congress nor a long line of IRS commissioners has forced changes. A Deputy Commissioner for Operations Support with strong IT management skills should be appointed by the IRS Commissioner or the President (once the position is made a presidential appointment). The various subordinates to the

Department of the Treasury

Weak

Vector: 60%

Pages: 730-732AI Enhanced

AI Analysis:

"The HONOR Act uses tax code changes to impose sanctions on Russia, whereas Project 2025's Treasury section focuses on domestic tax relief to encourage savings, investment, and entrepreneurship; they share only the mechanism of amending tax provisions but differ in purpose and thematic focus."

Key themes:tax code amendmentforeign tax creditdeductiontax policy

— 697 — Department of the Treasury time for any purpose. This would allow the vast majority of American families to save and invest without facing a punitive double layer of taxation. Entrepreneurship. To encourage entrepreneurship, the business loss limita- tion should be increased to at least $500,000. Businesses should also be allowed to fully carry forward net operating losses. Extra layers of taxes on investment and capital should also be eliminated or reduced. The net investment income surtax and the base erosion anti-abuse tax should be eliminated. The estate and gift tax should be reduced to no higher than 20 percent, and the 2017 tax bill’s temporary increase in the exemption amount from $5.5 million to $12.9 million (adjusted for inflation) should be made permanent.21 The tax on global intangible low-taxed income should be reduced to no higher than 12.5 percent, with the 20 percent haircut on related foreign tax credits reduced or eliminated.22 All non-business tax deductions and exemptions that were temporarily sus- pended by the 2017 tax bill should be permanently repealed, including the bicycle commuting expense exclusion, non-military moving expense deductions, and the miscellaneous itemized deductions.23 The individual state and local tax deduction, which was temporarily capped at $10,000, should be fully repealed. Deductions related to educational expenses should be repealed. Special business tax pref- erences, such as a special deduction for energy-efficient commercial building properties, should be eliminated.24 Wages vs. Benefits. The current tax code has a strong bias that incentivizes businesses to offer employees more generous benefits and lower wages. This limits the freedom of workers and their families to spend their compensation as they see fit—and it can trap workers in their current jobs due to the jobs’ benefit pack- ages. Wage income is taxed under the individual income tax and under the payroll tax. However, most forms of non-wage benefits are wholly exempt from both of these taxes. To reduce this tax bias against wages (as opposed to employee benefits), the next Administration should set a meaningful cap (no higher than $12,000 per year per full-time equivalent employee—and preferably lower) on untaxed benefits that employers can claim as deductions. Employee benefit expenses other than tax-deferred retirement account contributions should count toward the limita- tion, whether offered to specific employees or whether the costs relate to a shared benefit like building gym facilities for employees.25 Tax-deferred retirement con- tributions by employers should not count toward this limitation insofar as they are fully taxable upon distribution. Only a percentage of Health Savings Accounts (HSA) contributions (which are not taxed upon withdrawal) should count toward the limitation.26 The limitation on benefit deductions should not be indexed to increase with inflation.27 Employers should also be denied deductions for health insurance and other benefits provided to employee dependents if the dependents are aged 23 or older.

Trade

Weak

Vector: 60%

Pages: 834-836AI Enhanced

AI Analysis:

"The HONOR Act uses tax code amendments to impose economic sanctions on Russia, while Project 2025's Trade section focuses on liberalizing trade, reforming tariffs, strengthening the WTO, and countering China; there is only a tangential overlap in using economic tools to influence foreign behavior."

Key themes:economic sanctionsforeign policytrade policy

— 801 — Trade l Repeal the Jones Act,48 a century-old “Buy American” maritime law that has decimated the U.S. shipbuilding industry. l Work with Congress to restore the President’s Trade Promotion Authority, which would expedite the negotiation of trade agreements with the United Kingdom, Switzerland, Taiwan, the European Union, and other allies, and keep trade-unrelated provisions out of trade agreements. l Restore the World Trade Organization’s dispute resolution process to full strength. l Create a successor to the WTO (assuming that it has been fatally wounded) that is open only to liberal democracies. This would prevent authoritarian countries like China from abusing the organization for their own ends. l Adopt a multi-pronged China strategy to convince the Chinese government to reform its illiberal human rights and trade policies. l Rejoin the Trans-Pacific Partnership (TPP), whose 11 members are developing institutional trade norms in an important geopolitical region without U.S. input or involvement. l Reorient the proposed Indo-Pacific Economic Framework for Prosperity to focus only on trade issues, which it currently ignores in favor of progressive wish-list policies. l Strengthen diplomatic pressure (in concert with allies) against Beijing’s abuses. Encourage cultural and intellectual engagement with the Chinese people, remembering that blue jeans and rock ’n’ roll helped to win the Cold War. Tariff Relief. When people try something repeatedly and it still doesn’t work, they should stop doing it—especially when the consequences turn out to be just what conservative economists have long predicted they would be.49 With tariffs, the proper reform is not only to get rid of the individual tariffs that have backfired, but also to build institutional safeguards against future abuse. We are five years into the biggest experiment with tariffs since the Great Depres- sion, and the results are in: The new tariffs raise consumer prices for ordinary Americans by about $1,200 per household every year50 and benefit only a small number of special interests. Steel and aluminum tariffs, enacted on national security grounds, angered allies. Beijing made not a single substantive reform in — 802 — Mandate for Leadership: The Conservative Promise response to four rounds of tariffs plus an attempted Phase One agreement. The Biden Administration has left the tariffs in place and is expanding them to pursue progressive policy goals. The first order of business for a new Administration that is focused on American workers and consumers is to repeal all tariffs enacted under Section 232 of the Trade Expansion Act of 196251 and Sections 201 and 301 of the Trade Act of 1974.52 The President can do this unilaterally, and Congress can do it through legislation. The second order of business requires Congress to pass legislation repealing Sections 232, 201, and 301. The U.S. Constitution places all taxing authority with Congress53 and none with the President. Congress used those provisions of law to delegate some of its taxing authority to the President because it was having trouble passing “clean” tariff legislation in the 1960s and 1970s. Unless and until this constitutional question about delegation is addressed, important reforms are available to the next Congress and the next President. Congress faced a problem of collective action in the 1960s and 1970s. As a whole, Members generally wanted to lower tariffs, but few individual Members were will- ing to remove tariffs that benefited special interests in their districts. Trade bills were invariably watered down through amendments and logrolling. The thinking was that the President, whose constituency is the entire nation, would be less prone to special-interest pleading than Members of Congress would be, so Congress del- egated some of its tariff-making authority to the President in 1962 and 1974 trade legislation. Delegating tariff-making might have worked in the short run, but in the long run, it was both constitutionally dubious and ripe for abuse. That came to pass in 2018. The Section 232 steel and aluminum tariffs, invoked in 2018 against Canada, Europe, and other allies on national security grounds, raised car prices by an aver- age of $250 per vehicle and gave America the world’s highest steel prices. They also harmed the construction, canned food and beverage, and other metal-us- ing industries. While this may have benefited the steel industry itself, each steel job saved cost an average of $650,000 per year that had been taken from elsewhere in the econo- my.54 That is no way to strengthen American manufacturing. The New York Federal Reserve estimated in 2019 that the Section 301 China tariffs cost the average house- hold $831 per year,55 a figure that has likely increased with inflation. The new tariffs have a clear record of failure—as conservative economists almost unanimously warned would be the case. Job number one for the next Administration is to return to sensible trade policies and eliminate the destruc- tive Trump–Biden tariffs. Strengthening American Manufacturing. The decline of American manu- facturing is a common political trope in both parties, typically invoked before a call for more government intervention. This narrative has several problems. One is that

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About These Correlations

Policy matches are calculated using a hybrid approach: initial candidates are found using semantic similarity between bill summaries and Project 2025 policy text, then an AI model (Llama 3.1 70B) provides detailed alignment ratings and analysis. Ratings range from 1 (minimal alignment) to 5 (very strong alignment). This analysis does not imply direct causation or intent.

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