The Economics of Gay Marriage

Ah, 2004. Shrek and Spider-Man battled at the box office, the excellent Funeral from Arcade Fire was released, and the banning of gay marriage was a hot topic in political culture.

Now it's 2007 and we've witnessed Round 2 of Shrek v. Spidey, Arcade Fire's follow-up Neon Bible, and continued political activity surrounding gay marriage, but in a direction vastly different than we witnessed in 2004. In the spirit of changing political winds, I just wanted to call attention to some of the unexpected benefits of gay marriage that may or may not be affecting the positions of leaders and officials. Back in 2004, the Institute for Gay and Lesbian Strategic Studies (IGLSS) reported that

"The Congressional Budget Office found that allowing same-sex couples to marry would boost federal income tax revenues by $400 million per year til the end of this decade, mainly because of the so-called “marriage penalty" [i.e. when individuals marry they, as a couple, are subject to higher taxes]...the net impact would be a federal budget savings of nearly $1 billion per year."

Another study from IGLSS and UCLA showed that "California would have a net savings of $22-25 million per year if same-sex couples could marry. A 2003 study of New Jersey’s Domestic Partnership Act, which goes into effect in July, predicts that the state is likely to see a net savings of $61 million per year by giving same-sex couples rights."

From these same datasets, a short piece in Mother Jones in March of this year outlined additional fiscal benefits stemming from gay marriage:

Newly formed gay households move up in income and are cut from programs such as Medicaid, resulting in savings of $50 to $200 million
 

 



Uninsured gays and lesbians, whose health care costs are now paid by the government, join their spouses’ insurance plans. If a third do so, federal costs drop by $190 million

If half the same-sex couples now living together get married (the rate seen in Vermont and Massachusetts) and spend a quarter of what straight couples do, it results in a wedding-industry boon of $2 billion

TOTAL SAVINGS: Up to $3.1 billion

Now, according to Citizens for Tax Justice, a D.C. based research/advocacy organization, the cost of President Bush's tax cuts over the calendar period from 2001 to 2010 is--ready for this?--between $2.4 and $2.6 trillion. Additionally, From fiscal 2002 through 2006, on-budget federal deficits totaled $2.4 trillion. According to CTJ,

the largest cause of these enormous deficits has been the remarkable drop in personal income taxes, which fell from 10.1 percent of the gross domestic product in fiscal 2000 to an average of only 7.3 percent of the GDP in fiscal 2002 through 2006 — a 28 percent drop. In fact, income tax revenues have been at or near their lowest levels as a share of the GDP in 55 years.

So, lower taxes contribute to a huge deficit. The Right remains committed to the mantra of low taxes, even in the face of a myriad of fiscal obligations (many of their own creation). For number-crunchers inside State Houses and inside the Beltway, the creation of a whole new category of taxable populations, and the reorganization of a demographic along cost-effective grounds, is probably looking mighty appealing just about now.

How much longer can symbolic acts of 'shrinking government 'be reconciled with realities? It might not be too long before a vocal economic consensus is reached regarding not only the moral, but the financial, need for gay marriage. If there is, any urgency will be a product of willy-nilly, tunnel-visioned policies that grow the deficit. One can only imagine the chaos in the conservative tent if such an economic movement should arise.