Bill Overview
Title: TEAM Volunteers Act
Description: This bill increases the rate of the tax deduction for the charitable use of a passenger automobile to equal the standard business rate (i.e., 58.5 cents per mile in the first half of 2022, then 62.5 cents per mile for the rest of that year) for taxable years beginning after 2021 and before 2024. It then provides for a permanent 24 cents per mile rate, adjusted annually for inflation, for taxable years beginning after 2023.
Sponsors: Rep. Craig, Angie [D-MN-2]
Target Audience
Population: Volunteers who use personal vehicles for charitable purposes
Estimated Size: 8200000
- The bill primarily impacts individuals who volunteer for charitable organizations and use their personal vehicles for this purpose.
- Volunteers who itemize deductions on their tax returns will directly benefit from this change, as it increases the mileage rate they can deduct, effectively reducing their taxable income.
- The bill applies to US taxpayers as it affects federal tax deductions, thus the primary population impacted will be in the United States.
- From a broader perspective, it may indirectly benefit charitable organizations by making volunteering more financially attractive.
Reasoning
- The target population consists of volunteers who use their personal vehicles for charitable purposes and itemize their deductions for federal income tax. About 8.2 million Americans are estimated to fall into this category. However, given the voluntary nature and financial capacity to itemize, not all will maximize the benefit.
- Given the size of the US volunteer population and the target demographic, individuals will experience varying levels of impact based on factors such as frequency of volunteering and annual mileage. For some, the increased deduction rate will result in a significant reduction in their taxable income, improving their financial wellbeing.
- The policy budget of $150 million in the first year and $2.495 billion over ten years will be spread across these individuals with varying degrees of personal financial benefit. Generally, however, broader impacts such as an increase in volunteer participation or the financial stability of charitable organizations are secondary outcomes and harder to quantify within given wellbeing scores.
Simulated Interviews
Graphic Designer (Austin, TX)
Age: 34 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 10/20
Statement of Opinion:
- This policy is a great incentive. The extra deduction might not seem much to some but it adds up over the year especially when on a tight budget. I’m considering adding another day of volunteering, knowing this helps offset the cost more.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Accountant (Minneapolis, MN)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 1.0 years
Commonness: 5/20
Statement of Opinion:
- The updated rate certainly helps. I can plan more long trips that require transportation, knowing this will squeeze my budget less.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Freelance Photographer (San Francisco, CA)
Age: 29 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 15/20
Statement of Opinion:
- It's nice to see support for volunteers like me who rely on our cars a lot. It feels good to be acknowledged in this way; it’ll make budgeting easier.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 5 |
Retired Teacher (Raleigh, NC)
Age: 56 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 1.0 years
Commonness: 20/20
Statement of Opinion:
- I continue to volunteer primarily out of passion, but the policy highlights my contribution! It's refreshing to see recognized financially, even though personally, it won't drastically affect me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Software Engineer (Seattle, WA)
Age: 48 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 1.0 years
Commonness: 15/20
Statement of Opinion:
- It's beneficial overall, though less crucial for someone like me who volunteers occasionally at best. It’s great for those who do more!
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Small Business Owner (Miami, FL)
Age: 62 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 10/20
Statement of Opinion:
- Given my frequent trips, this will indeed ease the cost issue. It makes a meaningful difference especially with gas prices being what they are.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Sales Manager (Denver, CO)
Age: 37 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 8/20
Statement of Opinion:
- Anything that provides financial relief for volunteers doing good work is a boon. It’s appreciated that we’re being considered.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Nurse (Chicago, IL)
Age: 52 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 1.0 years
Commonness: 12/20
Statement of Opinion:
- I volunteer not for financial gains but support like this policy is certainly a nice acknowledgment. It will help cover volunteer-related expenses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 7 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
College Student (Phoenix, AZ)
Age: 24 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 1.5 years
Commonness: 10/20
Statement of Opinion:
- As a student, every bit helps financially. This policy will allow me to volunteer more without worrying too much about cost.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Financial Analyst (New York, NY)
Age: 40 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 18/20
Statement of Opinion:
- I’m glad this focuses on volunteers, but for someone doing this kind of volunteer work, the impact won't be very noticeable.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Cost Estimates
Year 1: $150000000 (Low: $100000000, High: $200000000)
Year 2: $160000000 (Low: $110000000, High: $210000000)
Year 3: $250000000 (Low: $180000000, High: $320000000)
Year 5: $260000000 (Low: $190000000, High: $330000000)
Year 10: $300000000 (Low: $230000000, High: $370000000)
Year 100: $500000000 (Low: $400000000, High: $600000000)
Key Considerations
- The temporary nature of the elevated rate to match the standard business rate may incentivize more volunteers to claim deductions, impacting federal revenues more significantly in the short term.
- The long-term fixed rate of 24 cents per mile with inflation adjustment is less costly but still higher than pre-2022 rates.
- Estimating the exact number of volunteers who will claim these deductions is challenging, introducing uncertainty into revenue impact estimates.
- This policy does not create government savings, the cost is seen as a reduced tax collection.