GIVING CREDIT FOR DOING GOOD
By Datta Khalsa, Broker
My wife—who works on the forefront of the Diversity, Inclusion and Philanthropy programs at a leading company in the field—posed an idea that struck me as particularly apropos of this season where we give thanks and share with others.
The idea would be to create a symbiotic system where local municipalities could incentivize people to volunteer for projects and causes that lack the funding in their own communities, by paying them in the form of what we have given the working title Volunteer Tax Credits, essentially creating a gift that gives back to the giver.
This could be in the form of a credit towards sales tax on future purchases through local merchants, which would further stimulate the economy by keeping the money local. Or it could be a credit towards property taxes, which would offer a way to help keep a volunteer’s housing costs a little lower in the midst of spiraling home prices.
The mechanism for the credit could be either a physical or app-based card used in addition to their regular form of payment, in much the same way in which a bill is split between payers at a restaurant at the end of the meal, except in this case the extra card is used to cover the taxes. To further optimize their impact on the economy, these credits could even pay out at an additional bonus if used during specific times of the year when infusions would be particularly helpful, such as during the off-season in a town that relies largely on tourist dollars to stay afloat.
There is one major catch here: since the state gets the majority of both sales and property taxes, both of these credits would need to be underwritten by
Sacramento, which may or may not be feasible, but it wouldn’t hurt to pose the idea all the same. In the meantime, there are other taxes and fees that predominantly stay within the community which could be tapped without the need for outside cooperation.
For example, if the county has a project that has gone over budget, they could offer the contractor a tax-free Volunteer Credit towards future building permit fees or property transfer taxes, which could be applied towards a future purchase or project. Or a hotel might receive a Volunteer Cred it towards Transient Occupancy Taxes in return for offering transitional housing for the homeless during the off-season when they have sufficient vacancies to offer temporary shelter, in a time which also tends to be the coldest part of the year, when shelter is the most needed.
Aldous Huxley summed up the essence of what is needed to make the world a better place when he said, “It’s a little embarrassing that after 45 years of research and study, the best advice I can give people is to be a little kinder to each other.”
Whether or not the idea of a Volunteer Tax Credit ends up taking shape, now more than ever it is my hope that each of us make a difference during this holiday season and beyond by being a little bit more kind. And we don’t need to wait for a tax credit to make that happen.