BRIAN D. GALLE, Florida State University College of Law, GWU Law School
Email: bgalle@law.fsu.edu

This Article critiques the prevailing justification for subsidies for the charitable sector, and suggests a new alternative. According to contemporary accounts, charity corrects the failure of the private market to provide public goods, and further corrects the failure of government to provide goods other than those demanded by the median voter.

However, the claim that government can meet the needs only of a single “median voter� neglects both federalism and public choice theory. Citizens dissatisfied with the services of one government can move to or even create another. Alternatively, they may use the threat of exit to lobby for local change. Subsidies for charity inefficiently distort the operation of these markets for legal rules.

Nonetheless, there remains a strong case for subsidizing charity, albeit on grounds new to the literature. Charity serves as gap-filler when federalism mechanisms break down. For example, frictions on exit produce too little jurisdictional competition, and excessively easy exit produces too much competition - a race to the bottom. At the same time, competition from government constrains inefficient charities. Thus, charity and government each perform best as complements to the other.

Finally, this Article sketches the normative legal consequences of these claims. Most significantly, I respond to the claims by Malani and Posner that for-profit charity would be superior to current arrangements. That suggestion would fatally weaken competition between charity and government, defeating the only persuasive purpose for charitable subsidies.

J. MARK RAMSEYER, Harvard University - Harvard Law School
Email: ramseyer@law.harvard.edu

Japanese patients file relatively few medical malpractice claims. To date, scholars have tried to explain this phenomenon by identifying "faults" in the Japanese judicial system. They look in the wrong place. Largely, the faults they identify do not exist.

To explore the reasons behind Japanese malpractice claiming patterns, I instead begin by identifying all malpractice suits that generated a published district court opinion between 1995 and 2004. I then combine the resulting micro-level dataset with aggregate data published by the courts, and publicly available information on the Japanese health care industry.

I locate the explanation for the dearth in claims in the patterns of Japanese medical technology, and the reason for that technology in the national health insurance program. In order to contain the cost of its universal national health insurance plan, the Japanese government has radically suppressed the price it pays for the technologically most sophisticated procedures. Predictably as a result, Japanese doctors and hospitals have focused instead on more rudimentary - and more generously compensated - care. Yet, for reasons common to many societies, Japanese patients do not sue over rudimentary care. They sue the physicians who supply the most sophisticated care. Japanese patients bring relatively few malpractice suits because the government has (for reasons of cost) suppressed the volume of the services (namely, highly sophisticated services) that would otherwise generate the most malpractice claims.

LISA MILOT, University of Georgia Law School
Email: lmilot@uga.edu

Transfers of human body materials are ubiquitous. From surrogacy arrangements, to sales of eggs, sperm and plasma to clinics, to black markets for kidneys, to pleas for donations of body materials, these transfers are covered and debated daily in popular and academic discourse. The associated philosophical and legal issues have been explored by a wide range of commentators. The appropriate tax treatment of these transactions, however, is mostly unexamined.

Current law is unclear about what the tax consequences of these transfers are. There are no statutory provisions directly on point, Internal Revenue Service guidance is outdated and conflicting, and the small number of judicial decisions in this area are narrowly written to resolve only the tax liability of the particular taxpayer before the court. Moreover, there are only a few academic publications on this topic, of which the most comprehensive is a 1973 student note.

This lack of legal clarity reflects in part the complexity of the issues involved. Transfers of human body materials raise questions as to the appropriate tax treatment across multiple federal tax regimes, each of which is governed by a distinct set of rules and informed by different considerations of tax policy and history. Moreover, these tax issues are arising in the context of evolving jurisprudence involving human bodies more generally, and they implicate complex philosophical problems. Of particular significance in this debate is whether human bodies can only provide services, or if their materials can constitute property of the person from whose body they come: whether the human body is exclusively a laborer, or if it can also be a factory or a collection of spare parts. What is more, the technology that has enabled these transfers continues to evolve rapidly, increasing the demand for human body materials and creating new markets for which no well-defined regulatory frameworks exist.

In this Article, I offer a comprehensive methodology for handling the taxation of transfers of human body materials. To this end, I offer three principles for characterizing human body materials for tax purposes. This approach produces a workable set of doctrines that is consonant with our broader cultural and legal understandings, which I then apply to recurring forms of transfers of human body materials to illustrate the resulting tax treatment of these transfers.