How Would Legalizing Gay Marriage Affect the Economy?

Alden Wicker
Posted

It’s wedding season. So we’re busy looking for gifts, booking plane tickets, and buying inappropriate favors and drinks for the bachelorette party.

In fact, we may be doing more of these activities than before because we’ve got invitations for some new events: gay weddings.

That’s right, with seven states (plus Washington, D.C.) sanctioning marriage for same-sex couples, you’re more likely than ever to be invited to a wedding that involves two blushing brides or two handsome grooms.

But out of the nearly 650,000 same-sex couples in the U.S. only about 50,000 have married, according to the Williams Institute for Sexual Orientation Law and Public Policy at UCLA. That’s a whole lot of couples who could potentially walk down the aisle.

Setting aside the morality of gay marriage, let’s analyze how the legalization of same-sex marriage affects the economy and your own budget. (Just like we did for immigration.)

Read on to find out the surprising economic facts behind matching cake toppers:

The Impact on Same Sex Couples

Contrary to popular belief (and anecdotal evidence provided by that fabulous gay couple you know who always looks so bespoke), gay couples do not earn more than their heterosexual counterparts. In fact, LGBT couples both with and without children earn less than heterosexual ones, and more LGBT couples with children live in poverty and receive public assistance than straight couples.

This could be due to lifestyle and social factors. But at least part has to be because of the high financial hurdles gay couples face. The New York Times ran an analysis in 2009 and found that a same-sex couple raising two children will suffer a financial penalty of anywhere from $41,196 to $467,562 over their lifetime, depending on their income, health insurance and tax situation.

Below are some of the things they lose money on now–if gay marriage were federally approved they would no longer be at a financial disadvantage for these reasons:

  • Being ineligible to receive Social Security and pension benefits from their partner
  • Having health care benefits from their partner’s employer taxed as income
  • Paying high taxes when “gifting” to each other assets like cars or houses that married couples automatically own jointly
  • Not being able to take advantage of spousal retirement accounts
  • Paying high tax preparation costs
  • Spending on complex legal paperwork to give their partner the same rights as a spouse would

For example, one couple profiled by the Chicago Tribune spent $10,000 in legal fees to create the same protections a $40 marriage license would provide, like power of attorney, wills and trusts.

The cost of health care is especially onerous. We’ve talked before about how difficult it can be to obtain health insurance, and how medical costs are a leading factor in credit card debt. Being able to rely on a partner’s insurance is a safety net many depend on. Yet of the companies that do offer benefits, only 21% extend them to same-sex couples.

The Impact on Government Budgets

There’s only one point at which a gay couple may rethink (financially, at least) the trip down the aisle. They currently escape the marriage penalty on their taxes, meaning they pay less in income taxes overall. Though the government isn’t making this income from them, it is at least saving by not having to extend benefits like Social Security to gay couples, or employment benefits to partners of gay federal employees. The Congressional Budget Office estimated in 2009 that extending employment benefits such as health insurance to same-sex domestic partners of federal employees would cost the federal government $596 million in mandatory spending and $302 million in discretionary spending between 2010 and 2019.

The thing is, those are just two pieces of the government income and spending puzzle when it comes to marriage taxes and benefits. Looking at the entire picture, if same-sex marriage rights were granted nationwide, such marriages would generate a net $1 billion each year for the federal budget over the next ten years, according to a 2004 report by the Congressional Budget Office, mainly because the government would now start raising extra money in taxes from gay couples. That even takes into account the fact that newly married gay couples would also qualify for more tax breaks, and the government would pay out more to them for health care benefits and Social Security.

On the state level, a report from the Independent Economic Conference projected that same-sex marriages would generate $27 million in taxes and license fees for New York state over the next three years.

The Impact on the Economy

Let’s talk tuxes and wedding gowns. And engagement rings, DJs, flowers and all the other things couples spend on for their big day–or would spend, if they could get married.

The New York comptroller’s office estimated that the legalization of gay marriage in New York State last year would add $142 million to New York City’s economy from wedding-related purchases and tourism revenue in the three years after the law’s passage. The state economy could stand to gain another estimated $184 million. The additional tourism alone will generate an estimated 2,000 jobs.

That’s impressive, but it could be even more economically beneficial in reality. To come up with these numbers, researchers used a very conservative wedding spend of $4,000 (a hard feat to pull off, though possible as this heterosexual couple demonstrated). Couples actually spend an average of $27,000 on their wedding, according to a survey of gay and straight newlyweds by TheKnot.com.

While gay couples generally spend less on their weddings–since they may have already had a smaller commitment ceremony somewhere else or are at a later life stage and have been together for a long time already–the average New York City wedding comes in at $70,000. All that points to a wedding-related economic boost to New York in the next three years of a couple billion, according to The Daily Beast.

Aren’t these all just estimates? Yes, but they’re based on the previous experiences of other states. Below are the economic boosts states got from granting same-sex marriage rights in the first year after doing so:

  • 2004 Massachusetts: $60 million (Likely so high because, as the first state, it turned into a destination for couples looking to get married.)
  • 2008 Connecticut: $16 million
  • 2009 Vermont:  $5 million; Iowa: $8 million
  • 2010 New Hampshire: $5 million

New York has the highest population of any state that has legalized gay marriage so far, leading to a much larger projected economic boost.

The Economic Downside to Gay Marriage

There is one case in which you could be negatively impacted by the legalization of same-sex marriage:  If a neighboring state legalizes it before yours does. Rhode Island, for example, has missed out on about $8 million in revenue as gay couples pop over to Massachusetts to get married.

  • Anggiboneysp

    This article is a great disappointment.  It fails to identify many of the increased financial, social,and  emotional costs of redefining marriage.   As examples: federal taxes including social security, business expenses, product costs, the welfare of children, etc.  These increased expenses will likely not be immediate, but they will come.  May our leaders make better choices. 

    May our eyes be opened to the truth, of Jesus and His love, that we can respond to Him in love by obeying God and loving each other.  Willing to stand strong for what is right, and turn from what is wrong, and help our brothers and sisters turn from what is wrong too.

    • http://profiles.google.com/sharissadove Sharissa Dove

      I’m pretty sure Jesus doesn’t pay taxes so I don’t see how he figures into this conversation? 

      • Shemp Alfredo

        Maybe that person was saying a prayer.  A prayer that things will become better. It’s attitudes like yours that make this world suck. Maybe you should say a prayer. You may need it someday. Maybe you are one of the lucky one’s who has financial security with a good job, you have food on the table everyday, you have a roof over your head. Well, gay people work to and should reap the benefits. So maybe this person is saying a prayer for them. Use your head. Dah!

    • Anglophile

      If you have ever eaten shellfish or ham, you should be punished. If you have ever accidentally touched any bodily excretes, you should be punished, if you have ever yelled, or cursed about or to your parents, you should be stoned to death. If a women menstruates, she should be shunned for seven days. If you have an itch or rash, you should be locked away for seven days. Male stripping is okay, as long as it is not in front of immediate family. For women, it’s okay to be seen naked anywhere. Shaving is also wrong, according to the book of Leviticus.

      • http://www.facebook.com/mindelaneyjones A.p. Minister Delaney Jones

        I never sceen someone write something just to entertain themselves, and believe they are justified by it… and still be wrong, like 5+3+2= 15 wrong answer, but because you feel you know the theory of math, you justify your misrepresentation of love and affection, forcing others to accept it, as right, when clearly its wrong!

      • trueWorldview

        Typical misinterpretations of the Old Testament that are out of context with the entire text of the Scriptures.

    • http://www.facebook.com/mindelaneyjones A.p. Minister Delaney Jones

      WHATS NEXT LEGALIZING, MARRIAGE BETWEEN HUMANS AND ANIMALS, IT IS ON THE SAME UNDERSTANDING, ITS IMMORAL BUT IF WE SHOUT LOUD ENOUGH, THEN SOMEONE WILL MAKE IT RIGHT OOPS, LEGALLY, THEN LATER ON THEY WILL TEACH THE CHILDREN HOW ITS DONE, SO THEY WILL TRY NOT TO DISHONOR THEIR POOR ROLE MODELS OF CARETAKERS, WONDERING WHY THEIR MOM WONT TALK BACK TO THEM BUT WILL GIVE THEM RIDES TO THE STORE.. BUT WHO CARES LONG AS POPS HAPPY! ….an abomination is an abomination …does any one besides me see how the states they legalize gay marraige econmony has gotten worser not better, it is not an coincidence

      • GayRightsAdvocate

        First, there is no relation of beastiality to same sex couples. You are off topic and fail to prove your point because of many fallacies in you argument. You fail to do this because you do not know how to map out your thought process, clearly speak, and spell correctly.

        Second, your personal opinions should not affect my life in any way. Many people believed that interracial couples were immoral; it was only until the law changed when the Supreme Court acknowledged that marriage was a right. It was because of the 14th amendment, the due process clause, and the equal protection clause that helped overrule Loving v. Virginia (which was the same reason why DOMA recently got struck down). What is believed to be personally immoral by you is affecting people like me from obtaining rights I deserve that is stated in the Constitution. Simply put.

        And as for the first comment by Anggiboneysp, american same-sex couples are taxpayers of this country – like yourself – who are ENTITLED to the same benefits as yourself. I do not see why you should be entitled to so many benefits when I myself, and many in the gay community, have been refused in obtaining them. The current state of law concerning gay marriage puts a FINANCIAL burden on gays – not you, a SOCIAL burden on gays – not you, and an EMOTIONAL burden on gays – not you. Gays pay more taxes then you, they go through heavier social burdens that you can’t possibly imagine, and the emotional toll is substantial. So before you talk about pain, realize what community you are attacking.

        And lastly, our country is headed in the right direction. Gay marriages are going to be legalized in the United States whether you like it or not. So start praying, if you may wish, and get your prejudice selves prepared.

    • trueWorldview
  • Shemp Alfredo

    I
    have to chuckle at the psychology government plays upon all. The complaints in
    this article are very much wanted by the government. Why? Because they think
    the more everyone complains about gay people not getting their fair share the better
    they will look. They eventual give gay folks some of the benefits they deserve
    making themselves appear as our caring government from the beginning. Furthermore,
    it’s been said the government so badly wants people to complain and then they
    finally give into the gay folks’ needs and the government gets the extra tax
    dollar from the gay folks. So gay people really do not get ahead, but the
    government does. Just wait and see what happens in the future. It really may
    sound silly, but I do believe this is true. We psychology students had a
    private chat about these issues one day after class. The government plays so
    many psychological games and we are unaware of it. I strongly urge citizens to
    begin analyzing the psychological reasons of why the government does what they
    do in any matter. It’s for clutching more of our money to take us out of the
    bad situation they put us in. They take all the credit for the positive things
    that happen and we citizens created the positive things. It’s all about money.
    They could care less about gays and their rights or anyone else for that
    matter. They want us to believe they care. They want us to believe what they
    want us to believe. It’s so sad the government plays these psychological traps
    and it’s extremely sad we fall into their tricks. Therefore, if you hear of the
    government trying to help individuals or groups out of a financial bind or
    benefits they deserve the government usually does it after numerous American’s
    complain. They know good and well what they are doing. They know what they are
    doing long before we complain and they win.

    • mrb2563

      Huh. I have to pay for straight peoples choices in life like health insurance and all that goes with raising a family, but I should not benefit from marriage because Civil agreements are against God’s will. Straight people should have the right to steal the benefits of marriage of LGBT people that straight people enjoy because it will cost money. Chuck Foo! It isn’t YOUR money, and you don’t have a right to push your beliefs on me and impose a fiancial hardship because you don’t agree with the way I live. I will NEVER marry someone I don’t love or feel connected to in every way, and if that means I’ m LGBT then I have a right to make that choice. I’d love to see the people who think I don’t have the right to be married allow their neighbor to ding them financially for everything they don’t like about them. Hypocrites!