If enacted, HB 2871 would directly alter existing taxation measures applicable to performing artists. The bill proposes a system where the expenses taken into account for deductions would decrease by a set percentage corresponding to increased income, illustrating a tiered approach to ensuring that high earners do not disproportionately benefit from tax deductions meant for lower-income individuals. Specifically, for every $2,000 above a gross income threshold of $100,000, the deduction amount would be reduced by a percentage, effectively phasing the benefit out for richer artists.
Summary
House Bill 2871, titled the 'Performing Artist Tax Parity Act of 2023', aims to amend the Internal Revenue Code of 1986. The primary focus of this bill is to increase the adjusted gross income limitation for above-the-line deductions applicable to performing artist employees. This legislative measure reflects a concerted effort to provide tax relief for artists who often face unique financial challenges within the entertainment sector. It is particularly significant as artists frequently incur expenses related to their work that are not covered by traditional employment arrangements.
Contention
The proposed changes also incorporate adjustments for inflation, ensuring that the threshold for income limitations is updated annually based on cost-of-living increases. This feature addresses potential concerns regarding the static nature of tax codes which can lose their intended benefits over time due to economic shifts. Nonetheless, there may be notable contention regarding the effectiveness of the bill in truly alleviating the financial burden on performing artists, especially considering the diverse income levels and employment structures within the artistic community.