MARRIED GAY FOLKS AREN'T PAYING THEIR FAIR SHARE! I'm on a lawyers' listserv that recently went off-topic with a foray into the hot issue of gay marriage. One (straight) poster was supportive of same-sex marriage, saying "let them share in the misery." He was flogged for his pessimistic impertinence, of course. But the Congressional Budget Office has done an analysis about the fiscal consequences of recognizing gay marriage. Remember that notwithstanding legal (under state law) marriages in Pennsylvania and Oregon, the 1996 Defense of Marriage Act precludes the federal government, including the IRS, from recognizing any marriages except those between one man and one woman. The result, according to the CBO, is that the feds are short-changed, because gay couples will continue to file single tax returns rather than the married/joint reutrns which would have some of them paying the infamous "marriage penalty." The CBO explains the concept:

For almost all married couples, filing jointly rather than separately results in lower tax liability. Depending on the division of income between spouses, marriage can lead to either higher income tax liability (a "marriage penalty") or lower liability (a "marriage bonus"). The greater the similarity in the two spouses' earnings, the more likely the couple is to incur a marriage penalty. Conversely, the greater the disparity in earnings, the more likely the couple is to receive a marriage bonus. When one spouse earns all of a couple's income, the couple always gets a bonus.

Together, EGTRRA [the 2001 tax legislation] and JGTRRA [the 2003 tax legislation] will reduce the number of couples incurring marriage penalties and increase the number receiving bonuses between now and 2010. JGTRRA provided relief from marriage penalties for 2003 and 2004 in the form of a higher standard deduction and broader 15 percent tax bracket for married couples. For 2005 through 2010, that relief is first reduced and then reinstated under the provisions of EGTRRA. Because of those changes and rising real (inflation-adjusted) incomes, marriage penalties would dominate during that period, and same-sex marriages would increase revenues by between $200 million and $400 million each year. After 2010, the expiration of all of EGTRRA's provisions would raise marriage penalties further, and revenues would be $500 million to $700 million higher each year than they would be if same-sex marriages were not recognized. (Permanently extending the marriage-penalty provisions in EGTRRA would reduce those revenue gains to less than $400 million per year after 2010.)

- posted by thegusdad @ 7/01/2004 03:07:00 PM