In the U.S., there’s a deep ambivalence surrounding the issue of gestational surrogacy, a process in which a woman carries and delivers a child for another couple or person.
It’s a hot topic when a woman decides to rent out her womb. Fees typically vary from $20,000 to $45,000 and up with an admin fee of $16,000 to $24,000.
With these kinds of figures, concerns about the legality, ethics and taxation come up for debate — and with our legal system the way it is, there appears to be only a handful answers.
Nevertheless, since the contractual aspects can render both parties (couple and surrogate) quite vulnerable, the legal side has been addressed and discussed at length in certain state statutes. In some states such as California it is legal and in others, it’s not.
The taxation side however, remains the poor relative; avoided, with no set standard of practice. The lack of clear guidelines in this area causes some agencies to issue a Form 1099 MISC to surrogates and others not.
But should surrogacy be considered akin to contracting for employment/labor and thereby taxable? Or be viewed as a "gift" to otherwise childless couples? How that question is answered has far reaching implications.
Supporters of the non taxable stance remind us that women’s rights should be free from government interference. Taxing their income would feel intrusive, insulting and may deter women from partaking in the process.
A glance at surrogacy chat boards and other reports reveals that from the surrogates viewpoint, many believe that they’re actively involved in "helping" and not "working," approaching surrogacy with a sense of altruism about their activities rather than running a "business." Although the money is an important role, there’s little evidence to suggest that these women are driven by materialistic gain.
Gail Sexton Anderson, Ed.M, of Donor Concierge.com, has been working in the surrogacy field for many years and points out that “for the amount of work that these women do, it breaks down to a few dollars per day”…. “These wonderful women more than earn their compensation for the wear and tear on their bodies and the strain on their families”.
But is it sound at both a social and fiscal level to tax surrogacy?
At a fiscal level, the accumulated loss of state income is arguable. If a fertility treatment such surrogacy is “outsourced” to places where the process is cheaper (as is the trend), the loss of revenue will eventually accumulate.
At a social level, some say that there may be some important benefits to taxation. Namely, the intense discomfort that the general public has about surrogate motherhood could begin to change. Surrogates are often viewed as weird, misguided, “in it for the money” and coming from a financial ‘underclass’ (think of the movie Baby Mama). Taxing the income gained could be a way in which the value of reproductive work is finally given legitimacy. A full range of social, political and cultural shifts can begin to occur with this step.
Question:
What do want to see happen here? Should surrogacy be taxed? Why?
Fenella Das Gupta is a licensed Marriage and Family Therapist ( #47275) working in Northern California, specializing in fertility counseling. She works with individuals and couples as they make their way through the fertility maze.
