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The Bowles-Simpson reform plan is receiving renewed attention from the left and right, but one aspect of it has received insufficient scrutiny: As part of an effort to “broaden the base” of taxation, Bowles-Simpson removes the tax deduction for charitable gifts and replaces it with a small tax credit .

Writing at CNBC, John Carney draws a parallel between volunteering and charitable giving to argue against such a revision :

Millions are Americans donate their time to charitable causes. Especially when disasters like Sandy strike, Americans turn out in droves to help the stricken. We’re a generous nation in this respect. The U.S. Bureau of Labor Statistics says that about 64.3 million people volunteered through or for an organization at least once between September 2010 and September 2011 (the most recent full-year numbers available). The median time spent volunteering is about fifty-one hours a year.

If we want to calculate the economic value of volunteering as something beyond zero, it helps to think of the foregone income as donated income. When a mom volunteers to coach her son’s soccer team, for example, that service is not worth zero just because she is not paid. She is performing a valuable service and foregoing the income she would otherwise receive. That income is donated back to the team.

The Internal Revenue Service does not currently impute this foregone income to taxpayers. But it certainly could do this. It could recognize that the volunteer is receiving and then donating an income. Under our current system, obviously this income should be deducted because it is charitably donated. Absent a charitable deduction, however, this income should probably be taxed . . . .

What makes taxing volunteer work seem so wrong is that we don’t think of time spent volunteering as producing income. Even if it is the “economic equivalent” of receiving income and donating it back, that’s doesn’t capture our feeling for what is happening when someone volunteers his or her time. We think of the labor provided as genuinely free.

This logic, however, should extend to charitable giving as well. When income is earned and then donated to a charitable organization, it isn’t really any more like personal income than the income that is foregone by the volunteer. In either case, the value of the services wind up with the charity rather than the individual. Should the source of the income—your employer rather than the charitable organization—really make all that much of a difference?

To put it slightly differently, when you donate an hours worth of your salary to a charitable organization, it is the economic equivalent of you having volunteered for an hour. You performed the labor, the charity got the value of that labor.

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