Nov. 11, 1998
Marriage May Not Be Financially Wise For Gay
By Steve Friess
Forget for a split-second all of the idealistic,
principled reasons why gays and lesbians should be allowed to
Forget the religious and moral arguments you may regularly endure
with your parents, your co-workers or your priest about the
relative value of a gay and straight relationships. And forget
all high-court battles that have ensued across the U.S. in the
seven years since a trio of same-sex couples sued the state
of Hawaii for the right to obtain a marriage license.
Yes, forget all of that. Imagine instead a world where Jesse
Helms and Jerry Falwell recognized their error, where Anne Heche
can be called Ellen DeGeneres' wife without the media sticking
the word wife in quotes, where you and your beloved could live
out your days in legally recognized bliss. Would it be worth
it? Not "worth it" from a personal or ethical point of view.
Would it really be worth it financially?
"For tax purposes, I don't see any advantages," says Gary Babe,
a Las Vegas financial planner who is gay. "As a couple you can
juggle finances to make it work in your favor."
Indeed, the most significant financial advantage now available
to same-sex couples is not being subject to the so-called "marriage
penalty," in which the standard deduction received by a married
couple filing jointly is less than double what a single person
There are rumblings in Congress to eliminate this archaic rule
created for an era when only one spouse, usually the husband,
earned a substantial income. But few political watchers expect
the federal government to easily give up any tax source that
reliably delivers millions into the U.S. Treasury each year.
Thus in 1998, a same-sex couple can claim a combined standard
deduction of $8,500, while a heterosexual married pair can only
knock an automatic $7,100 off their taxable income total. And
because the IRS doesn't view the gay duo as a team, each partner
can remain in lower tax brackets than they would if income were
combined on the 1040.
"The partner with the higher income should be taking the full
mortgage deduction (for home-owners) and the same person should
be making out all the charitable deductions," says Brenda Stout,
a openly gay Las Vegas accountant. "The other person files the
short form with the standard deduction. That's called good tax
planning. To split the deductions down the middle is
throwing away a free deduction."
Marriage: Doesn't Make Sound Financial Sense
Brenda Stout knows of these benefits first-hand. Stout's girlfriend
of nine years, Gloria Dillon, is entering her final year as
an accounting major at University of Nevada at Las Vegas, and
their single status was considered a boon to her landing federal
grants and loans to pay the college bill.
Dillon also has a 17-year-old daughter, which further boosts
her appeal on a loan application as a single mom. Truth be told,
the pair have been raising the daughter and sharing that expense
together for nearly a decade but the law does not recognize
"If we were considered legally married, she would lose those
advantages because she'd have to put down our combined income,"
The Flip-Side: Legal Advantages
State-recognized marriage does carry several significant legal
benefits, including various assumptions about who owns the couple's
property if one dies and who has rights in a medical setting
to make decisions for an incapacitated party.
But almost every legal guarantee implicit in state-recognized
marriage can be mirrored by hiring a family planning attorney
to draw up paperwork, says openly gay Chicago attorney Daniel
Such work could cost up to $500, according to Washington D.C.
attorney Loyal Snyder, which is greater than the approximately
$100 it usually costs for a wedding certificate in most states.
Yet, Snyder warns, those contracts are still not as strong as
those they emulate in legalized marriages. "You cannot build
an entire substitute for the legal framework of marriage," Snyder
says. "Unmarried partners can handle most property issues as
good as or better than married people, but when it comes to
areas like medical power of attorney, sometimes the family might
fight your contract in court. Nobody would even think do that
to a married couple. Can you imagine the money a partner might
have to spend to get access to and control over decisions made
in medical circumstances?"
Also lost without a legal marriage is the presumption that a
surviving spouse is entitled to proceeds from a pension, Social
Security or insurance when the partner dies. Even if a gay spouse
can access the pension funds, there is usually a tax cost that
does not apply for the married survivor, says Las Vegas accountant
Other costs lurk. Probably the most hidden of these is how the
IRS treats the domestic partnership benefits that dozens of
major corporations and local governments offer nowadays. The
money spent by an employer on the insurance premiums for the
unmarried spouse is viewed as taxable income for the employee
and in some cases could even push that employee into a higher
"Unmarried employees are required to pay taxes, where married
employees are not," says Suzanne Goldberg, staff attorney for
Lambda Legal Defense and Education Fund. "So it's a clear case
of discrimination against unmarried employees which, of course,
includes many gays and lesbians."
Auto insurance is another problem for gays. Tom Harris and his
lover, Joe, are both 25, jointly own two vehicles on which they
pay $1,043 every six months to Geico Direct Auto Insurance for
liability and comprehensive coverage. They would save $202,
or almost 20 percent, off that rate if they were legally married,
according to a Geico customer service representative.
The Future: The Buck Stops Here
Yet even on that count, times are changing. The Hartford Insurance
Company, which has independent agents in every state, this year
became the first to offer its lower married rates to domestic
partners. To qualify, the couple must occupy the same residence,
be jointly responsible for basic living expenses and be willing
to sign a short statement declaring they are "in a committed
relationship of mutual caring."
Still, says Stout, those costs pale in the shadow of the thousands
of dollars saved over the course of a lifetime through the standard
"That's the big-ticket item, the tax thing," says accountant
Blake McGroth of Los Angeles. "It's hard to put a price tag
there, but that has to tower over everything else. Now, I believe
in the rights of queers to marry very strongly if that's what
they want to do. But I'll tell you right now, it's not going
to make them any richer."