One of the arguments put forth by advocates of lesbian and gay marriage is that same-sex couples should be entitled to the same tax benefits enjoyed by married couples. Often, however, advocates of this position overlook the fact that the federal tax laws do not always bestow benefits on married couples. In addition to the “marriage penalty,” other tax detriments that married couples experience are: (1) joint and several tax liability on a joint return; (2) the inability to recognize losses on sales between spouses; and (3) numerous tax attribution rules that treat spouses as a unitary taxpayer.

Nonetheless, married couples do receive considerable tax benefits. Husband and wife can transfer wealth to each other free of income, estate, and gift taxes. Employers often provide important fringe benefits to the spouses of their employees. The federal tax law exempts the receipt of these benefits from income taxation. When married couples divorce, income tax rules are structured to allow the couple to unwind their property entanglements tax-free. Finally, for some married couples, the availability of the joint return does produce a tax savings.

None of these specially enacted tax benefits is available to lesbian and gay couples.

AGREEMENTS TO SHARE INCOME

Earned income is always taxed to the earner, unless the income is community property income. Despite the absence of satisfactory justifications for these results, the judiciary has held firm to this underlying rule for over sixty years now. Thus, there is no viable argument under current law by which a private agreement to split earned income can serve to split the income tax burden.