Friday, May 27, 2005
The BBC reports that the world's largest sperm bank is threatening to close its doors if the Danish government follows through on plans to tax the 500 kroners ($85) donors get paid for their deposits. In a letter to Taxation Minister Kristian Jensen, the sperm bank defend the donors' right not to pay tax:
It is a special kind of work and the fees paid cannot be compared to normal working income.
The Tax Foundation supports the Danish government's sperm tax reform efforts:
Until recently fees earned by sperm donors have been tax exempt. So the so-called "sperm tax" is in fact the removal of a distortionary tax preference from the Danish tax code. For better or worse, that's usually good tax policy since it simplifies tax rules and treats income from different sources more equally.
Although Reuters reports that "the source of the world's biggest sperm bank may soon run dry if Danish authorities decide to tax donors," the Tax Foundation notes that the cause is not the tax itself but rather the loss of anonymity to the donors caused by the tax (Form 1099-SPERM?). (Thanks to reader Ben Cunningham for the tip.)