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Revisiting the Income Tax Effects of Legalizing Same-sex Marriages

Author

Listed:
  • James Alm

    (Department of Economics, Tulane University)

  • J. Sebastian Leguizamon

    (Department of Economics, Vanderbilt University)

  • Susane Leguizamon

    (Department of Economics, Western Kentucky University)

Abstract

In this paper, we estimate the impacts on income tax collections of legalizing same-sex marriage. We utilize new individual-level data sources to estimate the federal income tax consequences of legalizing same-sex marriages. These data sources also allow us to estimate the impact of legalization on state income tax collections. We find that 23 states would realize a net fiscal benefit from legalization, while 21 states w ould experience a decline in revenue. The potential (annual) changes in state tax revenue range from negative $29 million in California to positive $16 million in New York. At the federal level, our estimates suggest an overall reduction in revenues, ranging from a potential loss of $187 million to $580 million. Overall, we find that the federal and state impacts are quite modest. We also find that our estimates are only marginally affected by alternative assumptions about how many same-sex couples will choose to marry and which partner will claim any children for tax deduction purposes.

Suggested Citation

  • James Alm & J. Sebastian Leguizamon & Susane Leguizamon, 2014. "Revisiting the Income Tax Effects of Legalizing Same-sex Marriages," Working Papers 1402, Tulane University, Department of Economics.
    • Handle: RePEc:tul:wpaper:1402
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    References listed on IDEAS

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    1. Gale, William G. & Potter, Samara R., 2002. "An Economic Evaluation of the Economic Growth and Tax Relief Reconciliation Act of 2001," National Tax Journal, National Tax Association, vol. 55(N. 1), pages 133-186, March.
    2. Stevenson, Adam, 2012. "The Labor Supply and Tax Revenue Consequences of Federal Same-Sex Marriage Legalization," National Tax Journal, National Tax Association;National Tax Journal, vol. 65(4), pages 783-806, December.
    3. Alm, James & Badgett, M.V. Lee & Whittington, Leslie A., 2000. "Wedding Bell Blues: The Income Tax Consequences of Legalizing Same-Sex Marriage," National Tax Journal, National Tax Association, vol. 53(n. 2), pages 201-14, June.
    4. Thomas C. Buchmueller & Christopher S. Carpenter, 2012. "The Effect of Requiring Private Employers to Extend Health Benefit Eligibility to Same‐Sex Partners of Employees: Evidence from California," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 31(2), pages 388-403, March.
    5. Alm, James & Badgett, M.V. Lee & Whittington, Leslie A., 2000. "Wedding Bell Blues: The Income Tax Consequences of Legalizing Same-Sex Marriage," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(2), pages 201-214, June.
    6. Paul R. Amato, 2007. "Strengthening marriage is an appropriate social policy goal," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 26(4), pages 952-955.
    7. John Graham & Jason Barr, 2008. "Assessing the geographic distribution of same sex and opposite sex couples across the United States: implications for claims of causality between traditional marriage and same sex unions," Review of Economics of the Household, Springer, vol. 6(4), pages 347-367, December.
    8. Daniel Feenberg & Elisabeth Coutts, 1993. "An introduction to the TAXSIM model," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(1), pages 189-194.
    9. Dan Black & Gary Gates & Seth Sanders & Lowell Taylor, 2000. "Demographics of the gay and lesbian population in the United States: Evidence from available systematic data sources," Demography, Springer;Population Association of America (PAA), vol. 37(2), pages 139-154, May.
    10. Gale, William G. & Potter, Samara R., 2002. "An Economic Evaluation of the Economic Growth and Tax Relief Reconciliation Act of 2001," National Tax Journal, National Tax Association;National Tax Journal, vol. 55(1), pages 133-186, March.
    11. Alm, James & Whittington, Leslie A., 1997. "Income taxes and the timing of marital decisions," Journal of Public Economics, Elsevier, vol. 64(2), pages 219-240, May.
    12. Frank F. Furstenberg, 2007. "Should government promote marriage?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 26(4), pages 956-960.
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    Cited by:

    1. Joshua J. Miller & Kevin A. Park, 2018. "Same-sex marriage laws and demand for mortgage credit," Review of Economics of the Household, Springer, vol. 16(2), pages 229-254, June.
    2. James Alm, 2017. "Is Economics Useful for Public Policy?," Southern Economic Journal, John Wiley & Sons, vol. 83(4), pages 835-854, April.
    3. Yang, Chih-lan Winnie & Denier, Nicole & St-Denis, Xavier & Waite, Sean, 2024. "Studying Individuals in Same-Sex Couples using Longitudinal Administrative Data from Canadian Tax Records: Opportunities and Challenges," SocArXiv j9skr, Center for Open Science.
    4. Elliott Isaac, 2020. "Marriage, Divorce, and Social Safety Net Policy," Southern Economic Journal, John Wiley & Sons, vol. 86(4), pages 1576-1612, April.
    5. Christopher S. Carpenter & Samuel T. Eppink & Gilbert Gonzales & Tara McKay, 2021. "Effects of Access to Legal Same‐Sex Marriage on Marriage and Health," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 40(2), pages 376-411, March.
    6. Elliott Isaac, 2018. "Suddenly Married: Joint Taxation And The Labor Supply Of Same-Sex Married Couples After U.S. v. Windsor," Working Papers 1809, Tulane University, Department of Economics.
    7. Goodnature, Mia & Neto, Amir Borges Ferreira, 2021. "Same-Sex Unmarried Partners in the Census," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 51(1), April.
    8. James Alm, 2017. "Is Economics Useful for Public Policy?," Southern Economic Journal, John Wiley & Sons, vol. 83(4), pages 835-854, April.

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    More about this item

    Keywords

    marriage; individual income tax; marriage tax; taxable unit;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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