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The American Legion
JOSEPH E. MILLER, JR., ASSISTANT DIRECTOR
THE AMERICAN LEGION
1608 K STREET, N. W. WASHINGTON, D. C. 20006
SUBCOMMITTEE ON TAXATION AND DEBT MANAGEMENT
COMMITTEE ON FINANCE
INCREASES IN VOLUNTEER MILEAGE TAX DEDUCTION
AUGUST 1, 1983
STATEMENT OF JOSEPH E. MILLER, JR., ASSISTANT DIRECTOR
BEFORE THE SUBCOMMITTEE ON TAXATION AND DEBT MANAGEMENT
Mr. Chairman and Members of the Subcommittee on Taxation and Debt Management, The American Legion is pleased to appear before you today to present its views in support of S. 1167 and S. 1579, proposed legislation that would amend the Internal Revenue Code of 1954 to increase the volunteer mileage deduction to the same level enjoyed by persons engaged in using privately owned vehicles (POV) for business and government activities. The American Legion, perhaps the nation's largest volunteer organization, strongly encourages the enactment of the proposals of Senator Durenberger and Senator Armstrong to correct an inequity in the treatment of volunteers who use their POV's for volunteer related activities.
Since the birth of our organization on March 17, 1919, The American Legion has been actively involved in this country's volunteer efforts. In fact, one of the primary goals of our initial meeting was to create, "a fraternity dedicated to the equitable treatment of all veterans, particularly the disabled, their widows and orphans". Six months later, meeting in St. Louis, The American Legion finalized its preamble which concluded with the mission "to consecrate and sanctify our comradeship by our devotion to mutual helpfulness" (emphasis added).
Since those early days, The American Legion has expanded its volunteer activities to include athletic events (like Special Olympics), scholarship funds, blood donor programs and a multitude of community based volunteer activities too numerous to cite here. To illustrate our involvement, we would like to ask that several documents which explain Legion programs and activities be included for the record. In addition, we would like to submit for the record a copy of the 1982 Consolidated Posts Report indicating the degree of involvement of American Legion Posts in volunteer programs and activities at the community level. Today, there are 58 Departments and more than 16,000 American Legion Posts in this country and overseas. In addition, there are nearly 12,000 American Legion Auxiliary Units worldwide. Together, the Legion and its Auxiliary represent more than 3.6 million members who serve their communities and fellow Americans without pay. Our membership looks to the federal government to recognize their contributions and services and for equitable treatment. National Volunteer Week is but one way the government has recognized the achievement of volunteers. Many of our members also depend on the volunteer mileage tax deduction to defray a portion of the cost of providing their services to charitable activities.
The deduction volunteers take for miles driven is not compensation. Rather, it is to help offset the expense of operating an automibile which is being used to conduct volunteer activities. More importantly, however, it is the individuals who are helped by the Legion's, as well as other volunteer organization programs who are the real beneficiaries of the volunteer mileage tax deductions
for without an adequate reimbursement, the programs aiding Americans
in need might be greatly curtailed.
Presently, an inequity exists that threatens to deny beneficiaries those services that they desperately need. To illustrate the burden facing the volunteer driver today we would like to submit copies of two letters received by the Legion's Legislative Division. The inequity that we are referring to is between the allowable mileage rate tax deduction which can be taken by persons driving for business and the deduction which can be taken by those persons who use their automobiles to conduct charitable activities. Mr. Chairman, the correction of this inequity is long overdue. Given the state of the economy and the ever increasing reliance on volunteers to conduct programs once supported by federal revenues, the perpetuation of a dual reimbursement rate can no longer be supported by arguments of cost to Federal Treasury, enforceability or that the current mileage rate is adequate to cover the incremental costs directly attributable to the rendering of charitable services.
In April of 1982 this Subcommittee was presented with a table showing the anticipated revenue loss from a bill, S. 473, that like S. 1167, was introduced by Senator Durenberger. The Treasury estimated that the loss in federal revenues for FY 82 at $7 million; for FY 83 at $55 million; for FY 84 at $102 million; for FY 85 at $115 million; for FY 86 at $135 million and for FY 87 at $159 million. A total of $573 million in lost revenues from FY 82 through Please notice that the anticipated loss from FY 82 to FY 83 increased by $48 million with a loss increase from FY 83 to FY
84 of $47 million.
But, the loss increase from FY 84 to FY 85 is only $13 million and for the FY 86, $20 million and FY 87 the loss increase was projected at $24 million.
Clearly, something dramatic would have to be at work in order to account for these increases which gradually level out in Fiscal Years 84 through 87. There are several possiblities for the dramatic increases during the early fiscal years as shown by the Treasury's chart. First, there could be a substantial increase in the use of POV's for charitable purposes. Second, there could be a substantial increase in the use of POV's for charitable purposes and a corresponding increase in the number of individuals claiming the charitable mileage deduction. And third, the number of charitable miles driven annually might remain constant and thus the increased allowance will simply reflect the added cost per mile allowed as well as an increased number of people claiming the deduction. But, even the maximum anticipated revenue loss of $159 million during FY 87 would represent an investment of less than two one-hundredths of one percent of the total federal expenditures for that year, based on current out year projections.
Assuming that the third possibility is representative of what will actually occur, then we are left with the perplexing problem of explaining the mammoth increases projected by the Treasury for FY 83, a rate which is double the projected increases for each of the remaining out years. Since, even non-itemizers are now permitted to claim a deduction for charitable mileage, the increase can not be attributed solely to an increase in the number of people claiming exemptions, unless there is a corresponding increase in