Volunteer time that is tax deductible is intrinsically able to provide incentive for individuals to volunteer in addition to assisting potential increases in GDP, mental and physical health, and improve cultural and socio-economic factors important to a nation, economy and culture. In other words, tax-deductible volunteerism in the form of time spent volunteering or working as a volunteer, could facilitate a significant positive influence financially and nationally.
There are several variables to consider when weighing the benefits and disadvantages of tax deductible volunteer work. Specifically, what are the costs to the government if any, how volunteer work increases GDP, why it can improve health and what benefits to culture and socio-economic standing it can have. The remainder of this article illustrates these issues and factors to demonstrate shy tax deductions to volunteer time are a good idea.
• Increases to Gross Domestic Product
Gross domestic product is the total value of all goods and services generated by a nation for a specific year. In the United States the GDP for 2009 was $14.26 Trillion according to the World Bank. An increase in volunteer work especially among the retiring baby boomer population could keep the workforce healthy and strong albeit through a transformed mechanism. It would be a waste to throw away the willingness, knowledge and ability of an experienced generation.
• Indirect boost to government revenue
A tax deduction for volunteer time would not cost the Government money because the volunteer time itself would increase Gross Domestic Product (GDP) and indirectly lower other government expenses to a greater degree than the tax deductions cost. Additionally, according to the New York State Office for the Aging, volunteer work can potentially increase government revenue.
To illustrate the above point, if GDP increases, so does the potential exports of products and services provided that the volunteer time and/or work has either a direct or indirect impact on those sectors of the economy impacting exports. The profit on those exports is taxed, so the Government would merely be shifting the tax but assisting greater wealth nationwide through improved exports. Furthermore, exports are just one area of the economy through which Government tax revenue can be obtained.
• Improvements to Mental Health
Work involving physical exercise and positive human interaction can be strongly linked to improvements in both mental and physical health on condition the work is performed within reason. That is to say, if some of the more negative consequences associated with working such as stress, don’t outweigh the benefits then time spent volunteering can be beneficial to the health of a nation. . Countless studies have linked physical exercise to improved health and the more mentally and physically healthy a nation is, the less government subsidized health care costs will be thereby lowering government expenses further.
• Increases in volunteer work
The principles of capitalism mandate financial incentive yields productivity when such motive is linked to profit motives. Since retirees may have more time to volunteer and might want to maximize their retirement standard of living, such a program would also benefit this increasingly long lived portion of populations. Moreover, if there is a high deduction cap to volunteer work or none at all, this essentially makes the potential tax savings optimal. Not only does can potential tax savings assist in mobilizing a retiring and/or motivated workforce, it can also increase volunteer work statistically. Since volunteer work is known to be a good and positive thing, increases in volunteer work would also be good.
• Decline in poverty
Tax deductible volunteer time or work can also help reduce poverty, welfare programs and re-invigorate stagnant demographics of the economy to be more productive, happier and healthier. Volunteer work can do this if volunteer efforts are aimed at helping marginalized groups of people live better lives through programs such as habitat for humanity, concern America and the community service society.
In summary, all the aforementioned potential benefits of tax deductible volunteer work comprise a net cultural enhancement in which several social, economic and medical aspects of a given demographic can benefit. In essence, tax deductible volunteer time has the potential to be a positive catalyst not just on the individual level, but also on the cultural and national levels.
Provided the incentive of tax deductibility is affective, many positive financial, and social changes can occur as a result. Should such results not occur, through low volunteerism despite a tax deduction, the government loses nothing because what isn’t deducted, is paid in taxes. Consequently, a tax-deductible volunteer program really is worth considering in light of any one of the above variables.