Legalizing Same-Sex Marriage: The Income Tax Consequences

What are the economic consequences, including the impact on government tax collections, of same-sex marriages? The tax laws in California are complex and too involved for publication in this blog. However, in an interesting article written a few years ago, several scholars at various universities collaborated in an article which begins an analysis of this topic by stating that:

It is well-known that a couple’s joint income tax burden can change with marriage. Many couples, especially two-earner couples with similar incomes, pay a marriage tax because their taxes when married are more than their combined tax liabilities as single filers.

This feature of the income tax suggests that legalizing same-sex marriages would increase income tax revenues, because gay and lesbian households are thought to consist primarily of two-earner couples.

In this paper we estimate the income tax effects of allowing same-sex couples to marry. We use estimates on the size of homosexual relationships, the percent who would marry if same-sex marriage becomes legal, and the average incomes of these couples, in order to generate estimates of the revenue impact.

Our calculations indicate that legalizing these marriages would lead to an annual increase in federal government income taxes of between $0.3 billion and $1.3 billion, with the likely impact toward the higher range of the estimates.

If you or someone you know owes income tax as a result of being in a same-sex marriage, a referral to a qualified tax attorney for help is important. Call Mitchell A. Port at (310) 559-5259.