Anti-gay discrimination is expensive

‘Do you think I’ll get a refund again this year, Joyce?”

Somewhere along our 20 years together, my spouse Joyce took over preparing my mom’s taxes: My mom loves the deal – she in return cares for our cats when we’re away – because Joyce’s command of tax code details often translates into refunds. So, every year, Joyce sweats over crumpled receipts, trying to please her mother-in-law.

But Joyce never gets frustrated until she turns her attention to our taxes – hers and mine, that is. To my mother, our mortgage company, our credit union, American Express, my minister and even our Spanish teacher, we’re a unit – blended financially and emotionally. Only U.S. governments insist on the fiction that we’re single.

This tax season is our second since we married in Canada. Thousands of gay Americans have wed there. Meanwhile, it’s the first tax season for the 4,962 gay couples who married between May 17 and Dec. 31 in Massachusetts, the first state to welcome gay couples into legal matrimony.

The Massachusetts couples are filing their state taxes as married, but must file as single on federal returns. But the rest of us – except Vermonters in civil unions – must pretend we’re single in filing state taxes.

All married gay couples are discriminated against by the federal government, which refuses to recognize our marriages. That discrimination costs taxpayers a whopping $1 billion a year, according to the Congressional Budget Office, largely because it means more gay people qualify for poverty programs than would if their spouses’ incomes were factored in.

In terms of taxes, the discrimination affects different couples in different ways. For Joyce and me, filling out tax forms means playing a surreal game of pretending it’s possible to separate our finances. Who writes off donations of joint household items? How about gifts to a cat rescue league, tsunami victims and an anti-hunger group?

And Joyce gets hit with an extra $792 in state and federal taxes because her employer puts me on her health plan – a benefit that (unlike for married heterosexuals) is treated as taxable income.

And the $10,899 we paid in 2004 Social Security taxes doesn’t buy us the same protections as heterosexuals: Neither of us is eligible for spousal or survivor benefits. The 2000 Census hints at how Social Security discrimination hurts gay families: More than one in 10 gay couples includes someone who’s 65 or older.

The Human Rights Campaign estimates elderly gay survivors receive an average of $5,528 a year less from Social Security because of the government’s shameful refusal to be fair.

Married heterosexuals inherit one another’s 401(k) nest eggs and IRAs tax free. Their gay counterparts do not. And gay survivors are hit with estate taxes – unlike married heterosexuals – upon inheriting even a jointly owned home.

Meanwhile, more than 1 million children are being raised by gay couples. Sixty percent of the kids live in states where both gay parents can’t be legally recognized.

The outrageous result: If the unrecognized parent dies, the child gets zero Social Security survivor benefits.

Federal tax policy hurts gay-headed families in other ways: A breadwinner who isn’t recognized as a parent can’t get child-related tax credits. For a one-earner family with two kids and a $30,000 income, that would mean a loss of $561 in federal tax breaks, HRC found. If the breadwinner’s employer offers health care to the family, the benefit is taxed. That creates an extra financial hurdle for gay couples who want one parent to be a stay-at-home mom or dad.

Governments ought not undermine families. Instead, tax policies should encourage stability – the kind on display when my spouse reminds her mother-in-law to save receipts.