The Smart Money: The economics of marriage equality

Posted Tuesday, March 26, 2013 in Analysis

The Smart Money: The economics of marriage equality

by Gina Hamilton

As the Supreme Court takes up the issue of marriage equality, it is only reasonable to consider the economic ramifications of what marriage equality would mean to society as a whole.

Religious considerations aside, the rationale for not permitting gay unions up till now has been that same-sex marriages do not produce offspring. While it is true that two women or two men cannot, in and of themselves, produce a child, the same can be said about many heterosexual couples with marginal fertility, or no fertility at all. These couples resort to other options for completing their families, including in vitro fertilization, sperm donation, surrogacy or adoption. 

And many married couples, especially older ones, decide in the end that their family is complete without children.

So the idea that a same-sex union would not have the same options for having children or not seems, on its face, to be a silly argument. If couples were tested for fertility before being granted a marriage license, many would not be allowed to marry, regardless of their gender. Of course, we wouldn't dream of preventing our parents from remarrying in their old age, or keeping our sisters and brothers who are infertile from having a meaningful relationship within the bonds of matrimony.

Indeed, from an economic perspective, it is beneficial to the society to have as many married couples as possible, whether they are adding to the surplus population or not. Especially if they aren't adding to the surplus population.

Married couples with two similar incomes, filing jointly, still pay a higher percentage of their income as income tax than do single people, even if they are cohabitating. For a couple with no children, this "marriage penalty" can be thousands of dollars. Married couples with children get to exempt them, if they don't itemize their deductions, and they have the additional benefit of many of their tax dollars going to finance schools and preschools and college supports, none of which the married couple with no children will ever see. 

Married couples without children and two comparable incomes are less likely to be eligible for tax credits such as the Earned Income Tax Credit. 

Married couples without children and two comparable incomes tend to have more disposable income in general, which is ploughed into the local economy, supporting small businesses that may well consist of parents with children.

A wedding is usually the most expensive party in a person's life. Wedding invitations, gowns and other attire, flowers, restaurants, bands, DJs, cakes, favors, trips, and gifts are all part of a typical wedding ceremony. All of this is money spent at some local venue (except in the cases of "destination weddings," of which Maine has a fair share), and little of it can be outsourced. That means small businesses benefit from any wedding, and increasing the number of weddings is good for them. Allowing for same-sex weddings would have a stimulative effect on small businesses that cater to weddings.

Newly married couples who set up housekeeping are also stimulative to the economy. Many purchase new homes, or at least furnishings and appliances for a rental. They buy insurance, often for the first time in their lives. They start saving for their eventual retirement. They may invest. They may buy a pet or two, an industry that leads to millions of dollars of spending on pet supplies.

Even couples who have been married for many years make purchases together that neither would be able to afford separately: new cars rather than used, a cottage for weekend getaways, a boat, an anniversary piece of jewelry or trip.

Any marriage equality would mean that couples would be entitled to federal benefits of marriage, including a small survivor's benefit from Social Security, the VA, military or federal employee pension survivor benefits. It also would mean marriage benefits such as being able to visit a spouse in the hospital or jail, and more. This is only basic fairness and should be extended to other "couples" that have lifelong commitments, even if unmarried. An example would be two sisters who live together their whole lives, or a child who lives with a widowed parent. However, that's not on the docket this year.

Overall, the benefits to same-sex unions far outweigh any drawbacks, from an economic perspective. 

And establishing a baseline for fairness, regardless of sexual orientation, will benefit us all in the end, and the LBGT children who may grow up knowing nothing but equality, as they face their own issues of sexual orientation.

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