Seems there are almost as many theories about how to change the tax laws as there are citizens to whom the laws apply. Here's one simple idea - a modest proposal that would help Americans at all income levels pay a bit less, while also providing some benefit to the unemployed.
Give the nation's non-paid volunteers a tax credit for their service.
Unlike charity in the form of money and goods, the truly benevolent volunteer efforts by Americans who donate their time is not acknowledged by the IRS. I'm speaking of volunteers who receive no compensation whatsoever, as opposed to paid volunteers such as those who serve in the military.
According to The Bureau of Labor Statistics, volunteering among Americans has climbed each of the last two years after three successive years of decline. This suggests that volunteering tends to follow patterns of economic hardship and unemployment, as more citizens respond to the need to pitch in.
Roughly 63 million people volunteer for charitable causes in the U.S. each year, at the rate of about an hour per week. Almost all of this donated sweat - delivering meals to the poor, coaching youth sports teams, etc. - is targeted at fundamental human needs, yet none of it is tax-deductible.
Ironically, the IRS allows volunteers to deduct the cost of transportation to their non-paying jobs but not the value of the work itself. How could this value be computed?
Currently, the average hourly wage for all civilian American workers stands at $22.75. A reasonable formula would take 25 percent of this figure, $5.69, as the allowable per-hour tax deduction for documented volunteering.
Volunteer workers should be allowed to carry the credits forward for, say, five years. This would allow unemployed volunteers to benefit in the future, while inspiring them to make productive use of their available time in the present.
Yes, participating organizations would have to qualify as non-profits, just as they must to receive tax-deductible cash donations. Yes, charities would have to provide written records for workers, which is what they already do for monetary donors. And, to be certain, there would be abuses.
But whom should the IRS worry about more: the billionaire who bends the rules when claiming a five-digit deduction, or the Meals on Wheels driver who adds 15 minutes to his timesheet?
Granting a tax deduction for volunteer service would be a step toward correcting serious inequities among paid and unpaid workers performing the same functions. For example, many U.S. communities have the means to employ full-time firefighters, while other locales rely on strictly volunteer forces. Why shouldn't the volunteers be entitled to a tax deduction? Hospital workers, school employees and other professionals often work side by side with unpaid volunteers who deserve a tax break for their service.
Based on current levels of volunteerism, the cost of such a deduction would be about $825 million per year if used completely by all who are eligible. More likely, some volunteers would not take the deduction, while others would be motivated to add volunteer hours, leaving the price tag under $1 billion annually.
At a time when tax-deductible monetary donations in the U.S. are falling - last year by 3.8 percent to roughly $303 billion - and unemployment is rising - currently at 9.8 percent, or about 15 million people - it makes complete sense to inspire and compensate volunteers for their service.
Presidents have long advocated volunteerism, from John Kennedy's "ask not what your country can do for you," to George H. W. Bush's "a thousand points of light," to George W. Bush's "new culture of responsibility." As Barack Obama put it, "The need for action always exceeds the limits of government."
Most non-paid servants give their time without any thought whatsoever of receiving anything in return. And that's precisely why acknowledging them with a modest tax reward makes perfect sense.