Would tax credits for organ donation violate federal law?
Friday, June 16, 2017
New Jersey is the first state in the U.S. considering "no strings attached" tax credits for organ and blood donors.
Legislation introduced the the state's Assembly in March would provide:
- A $100 state income tax credit to those who donate blood, platelets or plasma four or more times in a taxable year,
- A $1,000 state income tax credit to a resident who donates a part of their liver, lung, kidney or bone marrow, and
- A $1,000 state income tax credit to a deceased resident who was a registered organ donor and whose organs were used in a transplant. The refund would be applied to the deceased individual's income tax for the last year of their life.
A tax credit reduces the amount of taxes an individual pays. Therefore, it's more financially valuable than a tax deduction that lowers the amount of taxable income on which income taxes are based.
But there is some question as to whether the tax credits are legal under the federal National Organ Transplant Act, which prohibited the sale of human organs. Some think it may violate the law's stipulation that donors or their families are not to be paid for donated organs.
If the tax credits are approved, it could end up costing New Jersey a good amount of money. If every resident donates blood to take advantage of the tax credit, it would cost New Jersey $700 million each year.
The amount would balloon to $2.3 billion if every registered organ donor in New Jersey was able to use the tax credit. About a third of New Jersey residents are registered as organ donors.
Some say using tax incentives as an enticement to increase organ donation could become "bargaining chips" for families, prey on the poor and draw donors from neighboring states.
"It falls into the category of well-intentioned legislatures looking to do something to increase the number of donors," David Fleming, president of Donate Life America, told The Associated Press.
However, others say doing nothing to increase the number of available organ donors isn't a viable option.
"There are legitimate concerns with how incentives might affect people, but the stakes are way too high to allow conjecture and outdated legal precedent to rule the day," said Dr. Scott Halpern, a medical ethicist at the University of Pennsylvania's Perelman School of Medicine.
Even if the measure passes, it may not have the intended affect. Other states have attempted financial incentives in the past and not seen the number of registered organ donors increase.
The National Kidney Foundation says 19 states offer tax incentives between $5,000 and $10,000 designed to cover the cost of organ donations. A handful of states also credit employers who allow employees to take time off work for donations. Even so, a study looked at 15 states where similar incentives are offered and found no evidence that donations or registered donors increased.
The New Jersey Legislature is in session until the end of June before taking a break until November. While the tax incentive bill has yet to advance so far, the legislature did eliminate fees associated with duplicate drivers licenses if the driver opts to become an organ donor.
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