Bill Overview
Title: Volunteer Driver Tax Parity Act of 2022
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: Sen. Klobuchar, Amy [D-MN]
Target Audience
Population: Volunteer drivers who use their vehicles for charitable purposes
Estimated Size: 750000
- Volunteer drivers who use their vehicles for charitable purposes will directly benefit from an increased tax deduction rate, leading to possible increased participation in charitable activities.
- Volunteer drivers in the U.S. are likely a small percentage of the population but represent a significant portion of those involved in community service and non-profit support.
- The legislation applies to taxable years which affects those who file taxes and itemize deductions, thereby predominantly impacting taxpayers who volunteer.
Reasoning
- The policy is primarily targeting volunteer drivers who use their vehicles for charitable purposes, a relatively small yet impactful group within the population.
- Individuals impacted by this policy likely engage in volunteer driving for a variety of reasons including personal fulfillment, civic duty, or community service.
- The increased tax deduction could incentivize more driving activities, potentially improving the well-being of volunteer drivers through recognition of their financial expenditures.
- The policy is limited by a budget, indicating impacts may need to be considered in terms of number of individuals benefiting and the scale of increased deduction per individual.
- Not all individuals will be significantly impacted; only those who heavily rely on deductible miles for volunteer work will see a notable difference in their financial statements.
Simulated Interviews
Teacher (San Francisco, CA)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 15/20
Statement of Opinion:
- I enjoy volunteering and giving back to my community, but some months I do feel the pinch of gas prices and car maintenance. It’s nice that the mileage deduction is going up a bit.
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 |
Freelance Graphic Designer (Austin, TX)
Age: 32 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 12/20
Statement of Opinion:
- I do this volunteer work because it's important, not really for any financial benefit. But it's nice that they'll recognize mileage costs more.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Retired (Boston, MA)
Age: 58 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- This policy change is great because gas prices have really gone up, and it gives more reason to keep volunteering.
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 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 7 |
Corporate Accountant (Cincinnati, OH)
Age: 40 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 11/20
Statement of Opinion:
- The mileage deduction doesn't make much difference financially, but it shows respect for the effort and resources we put in.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Non-Profit Organizer (Denver, CO)
Age: 28 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 9/20
Statement of Opinion:
- With all the driving I do for the charity, an increase in the mileage deduction is very welcome! It makes financial sense.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Mechanic (Phoenix, AZ)
Age: 50 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- I love helping out, but it can get expensive with gas. Any support on that front helps volunteers like me to continue.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 4 |
Retired Nurse (Atlanta, GA)
Age: 63 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- I hope this policy stays. Lots of times, we volunteers pay out of pocket to help others get basic health services.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 6 |
| Year 3 | 9 | 6 |
| Year 5 | 9 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 4 |
Taxi Driver (New York, NY)
Age: 29 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 14/20
Statement of Opinion:
- I don't volunteer a lot, but when I do, I appreciate any incentives to cover the costs of running my cab.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Small Business Owner (Miami, FL)
Age: 52 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 13/20
Statement of Opinion:
- I think it's a fair way to acknowledge the costs volunteers bear. It's a nice gesture, though not life-changing.
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 |
IT Manager (Seattle, WA)
Age: 35 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 16/20
Statement of Opinion:
- While I don't rely on the deduction, it's certainly good recognition of charity work that uses our personal vehicles.
- Personally, it doesn't change my motivation, but it’s a thoughtful policy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Cost Estimates
Year 1: $41250000 (Low: $30000000, High: $52500000)
Year 2: $45000000 (Low: $33750000, High: $56250000)
Year 3: $18750000 (Low: $13125000, High: $24375000)
Year 5: $19575000 (Low: $13732500, High: $25417500)
Year 10: $20734500 (Low: $14514150, High: $26954850)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The rate change is temporary until 2024 and permanent thereafter at a lower rate, reducing long-term fiscal impacts.
- The primary effect is a reduction in federal income tax revenue, with negligible cost elsewhere.
- Changes in participation in volunteer driving due to deduction adjustments may not significantly affect the overall estimated impact due to relatively stable volunteer behavior.