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High Price of Being a Gay Couple Mostly an Effect of DOMA

The New York Times featured on Friday the results of a two month study on the extra lifetime costs of being gay.

The reporters, Tara Bernard and Ron Lieber, tested the finances of hypothetical same sex couples in the three highest gay population: Florida, New York, and California. Their test couples paid from $40,000 to $470,000 more in their lives for being unable to marry.

These financial costs have social consequences. Andrew Sullivan, senior editor of the Atlantic Magazine, explains:

The effect of these policies is to encourage gay people not to form stable, lasting relationships (relationships that have been shown to increase people's health, happiness and productiveness). It is to exact a communal price on anyone who actually does embrace the responsibility of marriage.

Still, the article notes that “nearly all the extra costs that gay couples face would be erased if the federal government legalized same-sex marriage.” Because it's unlikely that the federal government will soon legalize gay marriage, it may seem that gay couples have to put up with these costs for awhile. 

But actually all the government has to do is get rid of Defense of Marriage Act. With DOMA gone, most of the costs of being gay would go too.

Take for example health insurance. When employers cover domestic partners, the extra costs from being gay stem from the tax consequences of domestic partner coverage. These tax consequences are because DOMA doesn't allow the IRS to recognize gay marriages.

In the Times article, health insurance posed the biggest cost unique to same sex couples. But the cost is only so large when one partner, not covered with his own job, must buy private insurance because his partner's job doesn't have domestic partnership coverage.

Or, look at the differences in social security benefits or IRA contribution limits. Gay couples pay more in these areas because of DOMA, not state laws. Other areas the article discusses–tax preparation, estate taxes (especially important for wealthy couples)–would similarly have little effect if DOMA were repealed.

While DOMA repeal may not happen soon, it will certainly come before the federal government even thinks about nationally legalizing gay marriage. As a result, gay couples may not have to put up with these extra costs for too long.

[Cross-posted at the Gay Couples Law Blog, which discusses same sex family law, estate planning, and taxes.]

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Gideon Alper

Gideon Alper