A Tax Cut for Same-Sex Couples

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Tax day is quickly approaching and there is much talk now of the right mix of revenue raising and spending cuts to address the budget deficit. House Republicans recently floated a long-term budget proposal larded with more tax cuts for the wealthy and vague promises that these “pro-growth” tax cuts will pay for themselves. Given Republican tax-cutting fervor, it’s surprising that they can’t get behind the one tax cut that really would cost the government no revenue—repealing DOMA.

Repealing the federal and state “defense of marriage” acts would be a significant tax cut with no revenue cost. The state and federal DOMAs purport to deny recognition to same-sex marriages (and sometimes civil unions and domestic partnerships, too). But, in reality, they do no more than require a same-sex couple to pay a tax for their relationship to be legally recognized.

Let’s consider the situation faced by two couples—one different-sex and one same-sex—both married in Massachusetts. Under Massachusetts law, both couples enjoy the same rights and have the same obligations. But how will the federal government and other states treat their relationships? Marital status is a factor in the application of more than 1,100 federal laws. And it will be the rare couple that never crosses a state line.

Other states and the federal government will routinely recognize the different-sex couple’s marriage. However, the same-sex couple can’t count on similar treatment. They will need to have wills, living trusts, powers of attorney, hospital visitation authorizations, and a domestic partnership agreement for their relationship to be recognized.

The different-sex couple may draft some of these same documents, but not to have their relationship recognized. They draft them to alter the default rules regarding inheritance, medical and financial decision making, and divorce that apply to their marriage throughout the country. The same-sex couple must draft these documents because the default rules do not apply to their marriage throughout the country.

If the same-sex couple has children—as so many do—additional planning is necessary. If the couple adopted their children, a shared-parenting agreement and powers of attorney may be necessary in case questions arise about whether other states must recognize the adoption. If a lesbian couple conceives through artificial insemination, they can’t rely on a presumption of parentage to create a legal relationship between the nonbiological mother and the child. As a backup, the nonbiological mother may wish to adopt the child and draft a shared-parenting agreement.

Different-sex couples would never dream of drafting a shared-parenting agreement or powers of attorney with regard to their children. And husbands would be shocked at the suggestion that adoption is necessary to ensure their parent–child relationship is recognized outside their home state.

For same-sex couples, the cost of this DOMA-related planning is significant. To get a partial estimate, I asked a law firm in Pittsburgh—where I live and teach—how much it would charge for its role in this planning. The firm, which has experience with legal planning for same-sex couples, responded that the cost would range from $7,000 to $13,500.

This significant financial burden is a tax on lesbian and gay families. Like a tax, it is unavoidable. Just consider what happens when a same-sex couple can’t afford to pay the tax. The federal and many state governments then forcibly take away the legal rights and obligations associated with their marriage. This is what happens when a taxpayer can’t pay her property taxes. The government steps in to take the property in satisfaction of the tax due. By taking in kind what the government can’t force a same-sex couple to pay in cash, the government is essentially imposing a tax on them.

That this tax does not aim to raise revenue is of no consequence. Not all taxes serve that purpose. For example, we speak of “taxes” on cigarettes even though the professed purpose of these taxes is to discourage smoking and reduce smoking-related health and financial costs. At best, cigarette taxes only incidentally raise revenue. Indeed, we would probably be delighted if they raised no revenue at all.

Like a cigarette tax—and many other taxes that act as disguised penalties—the purpose of the tax on lesbian and gay families is not to raise revenue. Rather, this tax furthers the government’s professed interest in discouraging the legal recognition of lesbian and gay families by making that recognition either more expensive or, in the case of those who can’t afford the expense, of limited significance.

In stark contrast to the House Republicans’ long-term budget proposal, which would sacrifice revenue to give more tax cuts to the wealthy while shredding the social safety net, repealing the tax on lesbian and gay families would strengthen the legal and social safety net without actually sacrificing government revenue. It’s about time that Republicans got behind repealing the federal and state DOMAs—the only tax cuts that really would pay for themselves.

-Tony Infanti

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