Same-sex couples take a $500K lifetime hit

They face higher costs from taxes and insurance and lower benefits from Social Security than their heterosexual counterparts.

By Bruce Kennedy Mar 29, 2013 7:17AM

Pair of wedding rings (© Fancy, Alamy)One of the two high-profile, same-sex marriage cases argued before the U.S. Supreme Court this week highlights the federal Defense of Marriage Act, or DOMA. This law defines marriage as the union between a man and a woman and denies married gay couples from receiving federal recognition and benefits.

But the actual case in question before the court focuses on estate tax.


Edie Windsor is contesting the estate taxes she had to pay after her partner, whom she married in 2007 after a 40-year engagement, died in 2009. "I brought my case against the government because I couldn't believe that our government would charge me $350,000 because I was married to a woman and not to a man," she recently said on CNN Radio.


Along with the cultural and societal issues stirred up by the same-sex marriage debate, there's an undeniable economic factor: Gay marriage would afford same-sex couples the same financial benefits available to many straight couples.

And those benefits can be significant.


One economist has tallied up the lifetime costs for same-sex couples unable to marry legally at around $500,000 per couple. According to ABC News Radio, professor Lee Badgett, director of the University of Massachusetts at Amherst's Center for Public Policy and Administration, says the costs of denying a gay couple a legal marriage add up across a variety of long-term financial fronts -- including health insurance, Social Security and retirement benefits, and federal income and estate taxes. 


Badgett told Bloomberg TV that same-sex couples are much more likely to be uninsured than their different-sex, married counterparts. At the same time, they're likely paying higher taxes and are denied benefits like Social Security if one partner dies.

Some businesses are already extending benefits to same-sex domestic partners. In 2011, the Bureau of Labor Statistics reported that 33% of state and local government workers and 29% of workers in the private sector, had access to health care benefits for unmarried, gay couples. And Poltico says those figures increase to around 50% when you factor in workers in larger businesses.


"On one level, the disparities are shrinking as more employers offer health care benefits to same-sex domestic partners," Badgett told Politico earlier this week. "On another big level though ... that extra taxation probably discourages some couples from signing up a partner for financial reasons, leaving them uninsured and vulnerable."


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Mar 29, 2013 9:07PM
The only way she could have paid $350,000 in estate taxes is if the beneficial assets exceeded $5,000,000 and they didn't have the protection of a Trust!
Mar 29, 2013 8:54PM
Isn't that a good thing? Liberals seem to favor larger govt. and higher tax revenue for the fed, so wouldn't they want to voluntarily pay more tax to support political ideology. I'm a-political so I don't care either way  but paying more tax could be a source of pride for them, right?
Apr 1, 2013 8:40AM
Drop the insistence of calling it marriage and you will have 90% of the population supporting reform to give all couple the same benefits (not all good by the way).
Mar 31, 2013 2:51PM
In case no one noticed, being single allows two earners $400,000 in earned income before the extra tax bite comes. Married, they can only earn a joint income of $250,000. Same rules apply to higher investment income tax and the new Medicare hit on investment income. What financial idiot of any sex would want to get married under those rules?
Apr 1, 2013 9:23AM
It has always been about the money. Coming out means elbowing your way to the federal feeding trough. Their overwhelming raging hormone imbalance pales in comparison to their appetite for money and the word marriage is meaningless because it has been bastardized by money. If you took money out of the equation  that would end the argument but that would mean the government would have to give up their title as MONETARY WHORES which is why we are internationally hated. But that's another story. And here we thought the government co-opted marriage to help families raise children but low an behold it was about the money for them too. A tiskit a TAX IT, a pretty welfare basket.
Mar 30, 2013 8:25AM
So it's really all about queers having more money. 
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