Gay Couples Get Hit in the Pocketbook. Repeatedly.
Saturday, October 24, 2009
Oct 24th, 2009 | By Velvet Blade | Read more in: GLBTQ
Gay Couples Get Hit in the Pocketbook. Repeatedly.
Winning the right to marry in several states is certainly a step in the right direction towards equal treatment. However, until the federal government acknowledges unions between ALL COUPLES as marriages, with all the same rights on a local, state and federal level, we have a long, long way to go. Currently, gay couples consistently pay much more in taxes, benefits, legal fees and insurance than their heterosexual married counterparts. Civil unions don’t protect you fully and neither do domestic partnerships. The definition of these two “alternatives” varies widely from state to state. Marriage is marriage is marriage.
Recently in their Money section, the New York Times ran an article entitled The Higher Lifetime Costs of Being a Gay Couple, (http://www.nytimes.com/2009/10/03/your-money/03money.html). I’m not gonna lie. It pissed me off. The Times hypothetical worst case scenario costs a lesbian couple a whopping $467,000 more over the course of their committed relationship than their straight counterparts — almost half a million dollars is the cost of being with your same-sex partner. (That’s some big, beautiful house, eh?)
This article puts things into a black and white perspective and clearly shows an element of continuing discrimination simply because we choose partners of the same sex. The NYT investigation looked at the obvious culprits, but considering that there are over 1,138 federal protections, rights and benefits that are based solely on marital status, no investigation could possibly cover all the ways in which we… well… get screwed.
With all the debates raging around health care, I think the additional money we pay in health insurance costs is a timely point to make. For instance, even if your company allows your same-sex partner to be added to your health care benefits, your partner’s portion of the premium will be taxed. An employee with a heterosexual spouse, pays the premium for their partner with pre-tax dollars. This can be a substantial difference. I looked into adding my partner to my employer’s health insurance (my employer allowed for same-sex couples to be covered, but did not contribute to that coverage), and my premium would have risen over 400%… and I would have been taxed on that increase! If my partner had a child that I provided for, my premium (taxed) would have increased 800%.
Perhaps this is why a recent UCLA study found that “individuals in unmarried partnerships are substantially less likely to have health insurance than their married counterparts.” http://www.lawcrossing.com/article/3821/Who-s-More-Likely-to-Be-Uninsured-It-s-Not-Who-You-Think-/ . This means straight as well as gay couples, but the straight couples have a choice, whereas homosexual couples do not. This being the case, yet another all-too-real expense that same-sex couples might endure is the increased financial risk of having a major health issue for an uninsured partner. Considering that premiums for health care have continued to increase (they have grown by 87% since 2000 based on a study done by the Kaiser Family Foundation), many people are priced out of the health insurance market. Obviously salaries have not kept up.
I was in a ten-year relationship with a woman who had a son (my “sonish”) from a prior heterosexual marriage. While we were together, I provided the majority of the housing, food and clothing for my “sonish”. If I’d had the same role in a straight marriage, I would have been able to claim 3 dependents, earned-income credit (EIC), other deductions and his student loan when he went off to college. As it was, I could claim nothing. In fact, for the majority of those ten years, I had to file single status and could not even claim “Head of Household” despite being so.
Only recently did my home state of Oregon begin to allow me to claim a non-working same-sex partner as a dependent. Since state deductions are based on federal returns, I have to fill out an additional “dummy” return as if I were in a married hetro-couple. A same-sex couple incurs more tax preparation costs because they can file jointly in their state (if the state recognizes same-sex couples on tax returns) but still must file as single on the federal return and additionally prepare this “dummy” federal joint return. That’s four tax returns versus two for a married couple.
If you own a house with a mortgage and one partner pays the mortgage and taxes, but isn’t named on the mortgage itself, the entire deduction is lost for federal taxes. The partner holding the mortgage can’t claim it, nor can the one paying it. A straight married couple can claim this deduction. Depending on the size of your mortgage and the value of your property, this is another substantial financial loss for same-sex couples.
Feel like you’re on a merry-go-round spinning far too fast? Dizzy after jumping through so many queer hoops? Here’s more:
If you dissolve your same-sex marriage, civil union or DP and get a ‘divorce’ you lose once again. With heterosexual couples, the home gets split as do other assets and there are no tax consequences. For a same-sex couple, if the house is split, the state might accept that as non-taxable, but the IRS will either see half of the house as a gift (possibly taxable depending upon the amount) or compensation for “services rendered” which would also be taxable. And “services rendered”?!! I find that more than a little insulting…
If alimony is ordered, the state will let the partner paying alimony write it off if that state recognizes same-sex couples, but the federal government doesn’t. Again, alimony for gays, even if ordered by a court, would be considered a gift or “services rendered” and be taxable… Three times, as it turns out… once when it is earned, and again when it is paid (since the IRS won’t let you use the deduction), and another time when it is received. The partner receiving the alimony income has to decide how to file it with the IRS: as alimony income, other income or self-employed income.
Each year, it is estimated that same-sex couples pay approximately 25% more per year than their heterosexual counterparts in taxes alone. Needless to say, this all adds up over the course of a couple’s lifetime. Feeling pissed off yet?
Those 1,138 benefits and protections aren’t just about taxes. They also include things like Social Security benefits (monthly income, death benefits and survivorship), immigration policy, Family Medical Leave Act, Worker’s Compensation survivorship benefits, pensions and on and on…
I know a gay couple who are multi-millionaires who have been together for 25 years. They can afford to hire the best attorneys and experts to make sure they are covered and protected to the best ability of the law, even though all their preparations may still fall short. My point? A straight married couple gets these protections automatically, whereas we have to pay for them out of pocket and still never come close. You can expect to spend anywhere from $5,000 to $25,000 or more in extra legal and accounting fees depending upon your circumstances. Most couples opt for less expensive ways to protect themselves – wills online, free legal forms, cheap attorneys (now that’s an oxymoron), putting each other on as many pieces of property with survivorship as possible (house, cars, etc.), holding life insurance policies with each other as beneficiaries (this will likely be taxed as well), submitting statements and living wills to doctors and hospitals stating that this person is your partner and should be treated as a spouse, etc.
Adding insult to injury are all the heterosexual couples who choose to get married to take advantage of spousal benefits and tax breaks. So much for the sanctity of marriage… These examples are all people I know:
A young man enters the military and finds he will be shipped off to a war zone. A friend of his is a single mother. He marries her so she will have commissary benefits, housing, health and other military benefits, and also a death benefit should he not return home. His view? If something happens to him, those benefits may as well benefit someone in need.
A young couple would rather wait a year to get married, but decide to have a court house wedding earlier so that she can be placed on his employer’s health plan. Their view? We hardly make ends meet as it is and this would save us hundreds of dollars per month.
A couple decides to get married because they would like to buy a house and the area they chose does not allow for unmarried couples of any orientation. Also, their mortgage as a married couple gives them substantial tax benefits that they would not get if they continued to live together and not be married. Their view? We plan on getting married anyway. Might as well move up the time line and gain benefits while saving money now rather than later.
Another young couple gets married two years before their chosen schedule to take advantage of tax breaks and employer-based health care as she prepares to work for the state and he makes next to nothing. This will potentially save them thousands of dollars over the course of their preferred two year wait to get married.
An older man marries a woman quickly after his wife dies so that she will get his Social Security benefits when he passes away. His view? Why shouldn’t someone get the benefits he has paid into for his entire life?
The list goes on of the way marriage is abused for financial gain, but you get the point.
When same-sex couples wed, they wed because it means something to them. It’s the best protection we have, albeit flawed federally and in most states, for our partners and ourselves. It’s a validation of our relationship, our love and our commitment to each other and yes, it affords some benefits and protection on a state level IF the state recognizes same-sex partnerships. It certainly isn’t for financial gain, as some who oppose same-sex marriage claim… at least not until all states and the federal government consider same-sex couples equal to their straight counterparts.
It’s a slap in the face each time we have to put “single” on a form or pay that extra 25% in taxes, or worse, when faced with health challenges and retirement. It’s a slap in the face each time a straight couple marries for added financial benefits based solely on marital status. It’s a slap in the face to us each time one of us is turned away from an ill partner in the hospital. It’s a slap in the face that though we pay more in taxes, we have fewer rights to the benefits and protection that many heterosexual couples take for granted.
It’s tragically ironic that we have been subsidizing straight couples through our lifelong contributions to Social Security, welfare and worker’s compensation since the inception of these programs. Yet, our partners do not receive the spousal benefits that straight couples get automatically. So when those opposed to equality in marriage cry out that legalizing same-sex marriage would break the system, I shout, “Then stop living off of my back!” I challenge any straight couple to turn down these benefits that they receive based solely on whether or not they are married. Stop allowing me to subsidize you. I challenge you to honor my equality.
Winning the right to marry in several states is certainly a step in the right direction towards equal treatment. However, until the federal government acknowledges unions between ALL COUPLES as marriages, with all the same rights on a local, state and federal level, we have a long, long way to go. Currently gay couples consistently pay much more in taxes, benefits, legal fees and insurance than their heterosexual married counterparts. Civil unions don’t protect you fully and neither do domestic partnerships. The definition of these two “alternatives” varies widely from state to state. Marriage is marriage is marriage.
Recently in their Money section, the New York Times ran an article entitled The Higher Lifetime Costs of Being a Gay Couple. I’m not gonna lie. It pissed me off. The Times hypothetical worst case scenario costs a lesbian couple a whopping $467,000 more over the course of their committed relationship than their straight counterparts — almost half a million dollars is the cost of being with your same-sex partner. (That’s some big, beautiful house, eh?)
This article puts things into a black and white perspective and clearly shows an element of continuing discrimination simply because we choose partners of the same sex. The NYT investigation looked at the obvious culprits, but considering that there are over 1,138 federal protections, rights and benefits that are based solely on marital status, no investigation could possibly cover all the ways in which we… well… get screwed.
To read the rest of the article, click here:
http://aworldofprogress.com/gay-couples-get-hit-in-the-pocketbook-repeatedly/
Yeah, it’s the same thing in Germany. No tax breaks. The bank has a keen savings plan for married couples supported by the government that we also weren’t eligible for. It’s a long battle…
Even though I am legally married in Iowa, any financial benefits that accrue are limited to those impacted only by the laws of the State of Iowa. It does simplify transfer of property and resolve issues of related to healthcare…as long as I get sick in Iowa.