Wedding bell blues: The income tax consequences of legalizing same-sex marriage

Recently, gay and lesbian couples have gone to court to farce the governmen t to allow same-sec couples to marry. Largely unnoticed during the debates surrounding same-sex marriages are their economic consequences, including t he impact on government tax collections. It is well-known that a couple's j oint income tax burden can change with marriage. Many couples, especially t wo-earner couples with similar incomes, pay a marriage tax because their ta xes when married are more than their combined tax liabilities as single fil ers. This feature of the income tax suggests that legalizing same-sex marri ages would increase income tax revenues, because gay and lesbian households ave thought to consist primarily of two-earner couples. In this paper we e stimate the income tax effects of allowing same-sex couples to marry We use estimates on the size of the homosexual population, the percent of this po pulation in homosexual relationships, the percent who would marry if same-s ex marriage becomes legal, and the average incomes of these couples, in ord er to generate estimates of the revenue impact. Our calculations indicate t hat legalizing these marriages would lead to an annual increase in federal government income tare:; of between $0.3 billion and $1.3 billion, with the likely impact toward the higher range of the estimates.