Same-Sex Relationships, DOMA, and the Tax Code: Rethinking the Relevance of DOMA to Straight Couples

Article excerpt

INTRODUCTION

According to Professor Derrick Bell's seminal article describing his Interest Convergence Theory, the interests of Blacks are only accommodated when they coincide with the interests of Whites. (1) By analogy, the interests of same-sex couples are only accommodated when they coincide with the interests of heterosexual couples. (2) The elimination of discriminatory provisions that cause heterosexual married couples to pay more federal income tax than their same-sex counterparts might just be the mutually beneficial interest necessary to prompt Congress to recognize same-sex legal unions.

Current federal income tax laws require certain heterosexual married couples to pay more federal income tax than domestic partners (3) and same-sex married couples who earn identical incomes. (4) Most domestic partners are same-sex couples not allowed to marry one another. (5) In an earlier article, I recommended that Congress create a new federal income tax filing category to eliminate these disparities and to equalize the tax liability between heterosexual married couples and their same-sex counterparts. (6) If Congress finds this recommendation untenable, this Article proposes another solution to mitigate these inequalities: Repeal Section 3 of the Defense of Marriage Act ("DOMA") which, for federal purposes, limits the definition of marriage to heterosexual marriage ("DOMA's Marriage Definition"). (7)

For purposes of federal law, DOMA defines marriage as "only a legal union between one man and one woman as husband and wife" and limits the application of the term spouse to "a person of the opposite sex who is a husband or a wife." (8) In effect, DOMA precludes the recognition of same-sex marriage for purposes of federal law. (9) There has been ample litigation involving DOMA, but most of the litigation has focused on how DOMA harms same-sex couples (10) with little attention paid to the inequities DOMA creates for heterosexual couples. Economically, DOMA causes many heterosexual married couples to pay more federal income tax than same-sex married couples who earn identical taxable income. (11) While DOMA's legislative history clearly indicates that Congress intended for DOMA to have the effect of "defending and nurturing the institution of traditional, heterosexual marriage," (12) the tax inequities DOMA creates undermines this intent. DOMA blatantly exposes the marriage tax penalty, (13) possibly discouraging traditional, heterosexual marriage in the process. (14) DOMA also adversely impacts the federal budget, thereby restricting available resources for the general public. (15) Additional tax revenues would be generated if same-sex marriage were recognized for purposes of federal law. (16) Contrary to what many may think, the Congressional Budget Office has determined that recognition of same-sex marriage would have a positive net impact on the bottom line of the federal budget. (17)

This Article endorses recent decisions made by the Internal Revenue Service ("IRS") with respect to the federal income taxation of domestic partners and same-sex married couples. First, this Article confirms that the federal income tax inequality between domestic partners and heterosexual married couples is compelled under current federal income tax laws (18) and DOMA does not preclude this federal income tax disparity. (19) Second, this Article shows that same-sex married couples should calculate income for federal income tax purposes in the same manner as heterosexual married couples. (20) In the absence of DOMA, married couples would be taxed equally for federal income tax purposes, but DOMA compels disparate federal income tax liabilities between same-sex married couples and heterosexual married couples, often to the detriment of heterosexual married couples. (21) Congress should act to equalize these tax liabilities. (22) Even those who find the federal income tax inequality between domestic partners and heterosexual married couples tolerable because domestic partnership is not identical to marriage must agree that there is something different about marriage. …