Tax Foundation Forum: Making Sense of Profit Shifting has reached its midpoint. In this halftime report, we provide a synopsis of the first nine of the 18 interviews in the series. This two-part review summarizes the key...
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- The Blind Deduction on the 1040
The Blind Deduction on the 1040
As you fill out your federal tax return (and you are filling them out, right?) you may encounter line 39a, which asks you to check a box if you or your spouse is blind. Back in 2005, Slate's Daniel Engber researched why the blind enjoy this tax break:
The Social Security Act of 1935 made a special provision for "Aid to the Blind," the National Federation of the Blind was formed in 1940, and an influx of blind war veterans had heightened the concern. The tax breaks were intended to alleviate the higher costs of living that the blind face. Blind people were more likely to hire guides, readers, and taxis. And they often needed to live closer to their workplaces, which meant they frequently paid higher rents.[...]
Why were the blind singled out for a special benefit? For one thing, blindness can be measured with relative ease. Federal guidelines are quite explicit: If you can't see better than 20/200, or if your field of vision is less than 20 degrees, you can take the credit. Other conditions (like bad knees, for example) are more difficult to assess, although filers with such ailments can deduct "significant medical expenses"—currently defined as anything over 7.5 percent of adjusted gross income—from their income.
The special exemption for the blind has led to some resentment from people with other disabilities. In the 1970s, Hawaii Sen. Daniel Inouye made several unsuccessful attempts to introduce a special exemption for the deaf.
Read the rest of the article here. Interestingly, the bill creating the blind exemption was passed in 1943 over President Roosevelt's veto, in part out of gratitude for the work done in defense industries by blind individuals.
Far be it from me to deny that blind individuals encounter difficulties that others don't. But helping the blind through the tax code has its drawbacks: because it's a deduction, it helps only those with positive income tax liability. There's no distinguishing between degrees of blindness or when someone became blind. The combined blind-elderly deduction on line 39a reduced federal tax revenues by $2 billion in Fiscal Year 2008.
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