December 19th, 2007
Some additional "business case" material…this is from the Workplace Professor Blog. There are some real numbers here and this is just looking at the tax inequalities on benefits.
The Williams Institute at the UCLA Law School and the Center for American Progress have published a new study on the impact of taxation of domestic partner benefits on both employees and employers.
Here are some highlights:
The Williams Institute and the Center for American Progress released a new study that analyzes tax inequalities on domestic partner benefits. (To read the full report, click here).Employer-provided health insurance is the backbone of health coverage for American families. Most people who have health insurance get it through their own employer or a family member’s employer. Public policy encourages employers to provide health insurance by exempting that form of compensation from taxation. As a result, married workers who get family health insurance benefits get a double benefit—they get health insurance coverage for their spouses and children and are not taxed on the value of that coverage.
In sharp contrast, workers who have an unmarried domestic partner are doubly burdened: Their employers typically do not provide coverage for domestic partners; and even when partners are covered, the partner’s coverage is taxed as income to the employee. Employers who cover domestic partners are also penalized under current law, since employer payroll tax responsibilities increase along with employees’ income and Social Security taxes.
The lack of recognition for same-sex marriages is not only in violation of basic principles of equal protection, but it also leads to these absurd consequences for companies and citizens of this country in which "the taxation of domestic partner health care benefits sets up a two-tiered tax policy that costs many American families and their employers millions of dollars each year." The study above estimates that this system costs employers some $57 million per year in additional payroll taxes and costs unmarried couples some $178 million dollars in additional taxes per year.
Something needs to be done about this inequitable state of affairs and short of recognizing same-sex marriages (which this Congress and Supreme Court do not appear ready to do), Congress should pass a tax law equalizing the burden on these equal benefits.