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Tax breaks for organ donors

By Kay Bell ·
Thursday, September 6, 2012
Posted: 1 pm ET

The first time I truly realized my mortality was when I noted on my driver's license that I wanted to be an organ donor.

It's a choice many people make, but not nearly enough. The United Network for Organ Sharing tracks organ donation needs and how they are met. Between January and May, 11,471 transplants were done. Impressive -- until you see that more than 115,000 others are waiting for the life-saving surgeries.

The selling of organs is illegal, but many states have enacted laws that offer live organ donors a tax deduction or tax credit to help defray potential medical costs, lodging costs and wages lost while making such a physical gift.

Would an increase in both the types of tax breaks or the number of states that offer them help increase the live donor pool?

Probably not, according to a new study published in the American Journal of Transplantation.

The study's authors "found no statistically significant effect of these tax policies on donation rates."

One possible reason why the tax benefits don't seem to be generating more live organ donors, according to the study, is that the value of the tax break generally is too low to defray the actual medical costs faced by donors.

A tax deduction of $10,000 for a family of four at the median income in the state of Wisconsin translates to an actual cash value of just more than $600, notes the study. Compare that to the financial burden for a living kidney donor in the U.S., which ranges from around $900 to almost $3,100, depending on the type of surgical approach.

Even when the donor's costs are at the extreme low end of the procedure scale, the tax break may cover only a fraction of the true total costs faced by the donor.

States might consider, suggest the researchers, increasing the deduction amount or changing the tax compensation to a tax credit, which is more valuable because it would lower the donor's tax bill dollar-for-dollar.

Still, I'm not sure how much of a tax benefit might get more people to donate an organ. A friend of mine received a kidney earlier this year from a niece who would never consider taking any kind of pay, direct or via tax filing, for her gift to her uncle. I suspect she's typical of living donors.

Most of the time such attempts at manipulating human behavior have at best limited success. Yes, higher tobacco excise taxes have helped reduce the number of younger smokers because they generally don't have as much money and every cent counts. But smokers who make decent money tend to feed their nicotine habits despite the costs.

And I don't know of any parents who ever had a child because of taxes, even though there are a variety of tax benefits associated with raising a family.

Would you consider donating an organ if you got a tax break? If so, what type and level of tax benefit would it take?

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September 08, 2012 at 3:03 am

Like drugs, you should be able to do whatever you want with your body, including selling your organs. This is hopefully a shortage that ends in the next decade or two with advances in cloning organs