Saturday, November 20, 2010

In Case You Were Wondering: The Financial Penalties For Being Unmarried

Stigma or Pride?  Shall the Congress or the Courts Decide?
Despite the fact that I would include myself in the category of people who are utterly unmoved by the romance of gay marriage (except when I am softened by pictures of people who are moved by it), I occasionally feel pissed off about structural discrimination that awards bonuses to people who can and do marry.

Today I opened a letter from TIAA-CREF that contains an "update" to my "original contract...which states that same-sex marriages aren't recognized under current federal tax law" because of the Defense of Marriage Act (DOMA).  Passed in 1996, DOMA defines marriage as a legal contract that can only be entered into by one man and one woman, and was declared unconstitutional by a federal district court last July.  It was signed into law by William Jefferson Clinton, for which (along with welfare reform and NAFTA) he will roast in the hell that hypocrites go to forever, regardless of how many other good works they perform.

The point of this form is that, should I predecease her, my partner will inherit my retirement account as if she were a stranger or a casual friend:  this goes for other federal inheritance laws designed to protect the common property of married folk.  Were I to perish tomorrow, we would have lived together in a committed fashion for over a quarter century, a state in which even the most troubled and fractious heterosexual couple might claim to be wed under common law.  What are the other financial penalties for being partnered but unmarried in the eyes of the federal government?
  • If you are gay-married under state law, you get to file two separate tax returns, which costs more.
  • If you have the good luck to have domestic partner benefits, or live in a state where you can gay-marry, you have to pay federal taxes on the amount of money kicked in by the university on behalf of your spouse as if it were income.
  • Even if you are gay-married, you cannot create a MERA (an instrument that permits an individual to reserve pre-tax dollars for the many medical expenses not covered by insurance) for both you and your partner, only yourself.
  • If your gay spouse does not have an income, you cannot count hir as a dependent and get a tax deduction.
  • Your gay spouse does not have access to any federal pension to which s/he might otherwise be entitled were s/he an opposite-sex spouse.
So all you straight married people out there who do get these things?  You are getting a big, fat, frakking bonus, and I would be interested in knowing what it is you do for our Republic to deserve it.  Or let me know what anyone in a state-sanctioned marriage would do to deserve all of these tax breaks:  if DOMA were rescinded tomorrow, and Partner and I continued living as we do but with a marriage license from the state of Connecticut, why would that federal magic trick entitle us to the extra $$?

Although I am quite sure that everyone who has a TIAA-CREF account received this letter, the vast majority of my heterosexual colleagues will throw it in the round file without a thought. To them, these financial privileges are invisible -- many, in fact, believe that they deserve them, even though they can't precisely say why when asked. For me, however, this letter is a particularly keen reminder of our  current state of sexual apartheid, and I think I will post it on my office door.

28 comments:

Janice said...

It's one thing that makes me proud of my province and employer: gay marriage is recognized, gay partners get full benefit rights. It's only fair.

Heterosexual marriage isn't in danger here or anywhere from gay marriage. The very name, "Defence of Marriage Act" is petty and sad. I remember when my country of origin used to be synonymous with liberty. It hasn't been that in my mind for a long, long time.

Anonymous said...

Well said, I never manage to make the points quite so succinct when I try to explain this situation to allies.

Not advocating kiddos necessarily, but it did remove a point of irritation when my partner and I had a child and I realized that my parents (who discarded me at 18) no longer had the strongest claim to my estate (e.g. over my partner) should I die.

Carolyn J. said...

Thanks for posting this Tenured. Well stated and well put. I advocate an end to all entitlements based on marital status, and each person should be able to designate whomever they choose as beneficiary, co-owner, co-tax payer whatever. I believe gay marriage is going to come back and bite us. There are no lesbian couples I have known for the last 30 some years who are still together. Just about every lesbian I meet over age 50 has had several partners, so there is no way in the law to deal with this economic reality. And lesbian poverty or near poverty is the dirty little secret of the lesbian and gay communuity -- gay men being blissfully unaware of it.
So I say, everyone should be able to get tax deductions etc., but like health insurance, it shouldn't be tied to marital status or job status-- only then would there be freedom for all.

Carolyn J. said...

Gay marriage and gays in the military sheesh... One upon a time we actually wanted to end war, and overthrow patriarchy. Now everything is a pale immitation of it. Our radical vision has been totally subsumed in heteroimmitative longing, instead of creative innovation. Harry Hay must be rolling in his grave right now.

Val said...

One of the legal blogs I read regularly has had a few recent posts about how Google, and some firms, have been paying what they've called a "gay gross up" which helps cover some of the discrepancies in benefits. Link: http://abovethelaw.com/2010/11/biglaw-perk-watch-mofo-takes-a-stand-for-fairnessand-shearman-sterling-says-it-gets-better/ (contains links to the other stories on companies doing this as well).

Also, vaguely related, this semester I'm taking Trusts & Estates, which I hadn't really realized could so much be renamed "law of the privileged." Our casebook goes through great pains to outline the way that "non-traditional" dispositions are often not honored by courts as well as specifically discussing some of the particular obstacles for same sex partnered folks. I had never really dug into how deep the discrepancies go... but even I've found it pretty surprising.

Susan said...

I get it. In Britain, you don't file joint returns, but there is an allowance for marriage/civil partnerships.

When I am world dictator, the state will say, we don't do marriage, we do civil partnerships, which come with these entitlements. If you want marriage, go to your religious institution. (This is more or less what you do in France, where the big deal is the civil registration of the marriage, not the wedding ceremony.

redbookish said...

I agree with everything you say about the penalties for being unmarried, but remember! It's a disadvantage not limited to gay couples. Try being a straight SINGLE woman of a certain age in academia. I cover for colleagues who have family responsibilities, I pay pension contributions so their spouses can inherit their pension rights (mine dies with me), and I have to put up with sideways comments about "not understanding" certain things because I am single & childless. Neither of these is by design.

I know, I know, I could marry tomorrow, but I repeat, try being a female professor of a certain age. I may as well wear shark repellent.

Civil partnerships are the way to go, but we need to rethink the idea of partnership being based only on a partnership defined, fundamentally on whom you're sleeping with.

I know the debate is more complex than this, but I just wanted to say ...

JoVE said...

Great post, and you hit the nail on the head that the problem is marital status discrimination, which goes beyond straight/gay. Why should marriage be a privileged relationship?

I've long supported an organization that works on these issues of marital status discrimination: the Alternatives to Marriage Project www.unmarried.org

Dame Eleanor Hull said...

OK, I receive the benefits of marriage, but believe me, they are not invisible to me. I was single for a long time, and lived with my partner without benefit of license for some years, and I know perfectly well that these benefits are denied to gay couples. That's why I got married in a place that allowed gay marriage, at a particular historical moment. I would like for everyone to be able to marry the partner of their choice. The thing that I find most miraculous about the idea of marriage is that, legally, my next of kin is now someone I chose, not anyone I'm actually related to, and I wish most profoundly that everyone had a right to that choice. Maybe I should care more about the finances, but that's the one that matters most to me.

Comrade PhysioProf said...

These laws that deny marriage equality as a civil right are based solely in religiously motivated hatred, plain and simple. The solution to all of this is to get the state out of the “marriage” business completely, and give absolutely no legal weight whatsoever to religious mumbo-jumbo ceremonies.

In this legal regime, any two people who desire the traditional legal appurtenances of “marriage” need to go to City Hall (or whatever registry office) and execute a legal document that creates the legal relationship. And we can make up a cool-sounding legalistic name for it. I propose humpterdy: “YAY! We just got humptered! Let’s partay!!!”

This way, religious fuckwits can keep their “marriage” to themselves–just as they do “baptism”, “bar mitzvah”, etc–and the state can continue furthering its legitimate interest in encouraging the formation of families headed by two people, but without entangling the apparatus of the state in wackaloon religious fuckwittery.

TA4EVA said...

The adjunctization of academia is another area which is heavily biased against unmarried academics. Married academics get health insurance through their spouse, assuming the spouse is in a job with benefits. So, if your spouse is making a good salary at a law firm with a good health plan, a benefits-less adjunct job at the local college doesn't seem like a terrible option at all.

By contrast, for unmarried academics, a benefits-less adjunct position is totally unworkable and unlivable. So the entire adjunct system creates this situation where unmarried academic workers (as well as academic workers who aren't *allowed* to be married) are pushed out of the workforce.

Anonymous said...

Marriage is a vital institution that underpins society. It is right and proper that the government creates incentives for married couples.

Absent marriage, the social situation of the United States would be much worse.

Historiann said...

May I amend that last comment?

"Absent marriage, the social situation of the United Straights would be much worse.

Yes, indeed. I think everyone should be treated as an individual, regardless of sexuality or partner or marital status. The government has no compelling interest in giving married people special rights. If human beings were recongized as individuals rather that presumed to be part of marriages or families, think of how much freer we'd all be. Think, for example, about how revolutionary it would be to get medical care as a right of citizenship, rather than as a privilege of marriage or because one's parent's employer provides it.

(But of course I recognize that this implicit extension of coverture into the 21st century is exactly the point!)

redbookish said...

Ummm, Historiann, quite a lot of Europe *does* have health care as a right of citizenship (yay! for the NHS!). We're in the happy position of civil partnership for same-sex relationships herein the UK -- although why they don't call it marriage, I don't know. bUt the rights and advantages of both marriage and civil partnership are not open to, for example, sisters who live together.

I've had this discussion with my American adopted brothers (well, we say we're family) whose wedding I attended in 2006 in SF -- I come from that generation of feminists who, like Carolyn J., were sceptical of the institution of marriage (gay or straight) and gay male activist I knew in Australia who also eschewed the institution. And I *do* see the advantages of recognition of next of kin etc. But I think the really revolutionary thing would be to recognise partnerships which are NOT predicated fundamentally on sexual relationships. If we want to go in that direction in the first place ... I'm still dubious ...

Token Straight Breeder said...

Lets ignore marriage itself, and think about why society might benefit from long-term committed relationships.

The government benefits when one human nurtures another. Essentially, providing free medical care and similar services that would otherwise cost the govt much more money. If children are being raised by adults, that is another long-term committed relationship that greatly benefits society -- medical care and education on the way to providing new taxpayers. (By raising children, I mean the difficult work of actively raising them, not ignoring contraception, and then all but ignoring the results.)

So lets ignore all marriage, and use the tax code to support any long term nurturing relationship.

Which will happen some time after the bridge I'm about to sell you celebrates its billionth crosser.

Therese Quinn said...

Divorce marriage from rights, I say.

Bev said...

Yeah, DOMA really sucks when it comes to Federal recognition for marriage benefits. However, same-sex couples have some advantages over married opposite-sex couples if they're willing to be proactive about it. One can take the standard deduction, the other can itemize- push all interest and earning from joint accounts to the lower-earning spouse if in a lower tax bracket. A lower earning spouse might individually qualify for the EITC where the couple would not qualify with combined income. 'Hire' your spouse to take care of your kid (if the kid is yours alone), and claim the Child Care Tax Credit. Sell appreciated property to your spouse with a valid installment note before a third party sale to delay the capital gain. Claim the refundable adoption credit for a second parent adoption, or better yet, both parents can get the full credit if both adopt the child! It's too bad these advantages won't fall into our laps, but with a little creative planning, you can minimize some taxes to offset the ones you'll incur by not being married.

Urban Exile said...

I am confused: What's the update? Why are they sending this letter out? Just to remind you that despite the unconstitutionality of DOMA, you are still screwed anyway? How utterly weird.

@Carolyn J: health insurance IS tied to marital status. I couldn't get my cushy Cadillac plan through FF until we married in August. Not sure what you mean with that comment...?

AcadeMama said...

Just sayin: I don't deserve them just for being married, and they're not invisible.

Now what? I vote for the people I think will change things, and things don't get changed. The best I can do, for now, is try to influence the minds of those I teach. I'm sure many would call that indoctrination. I think I'd like to call it: enlightenment.

Liz in Ypsilanti said...

I am not only privileged by being a married heterosexual, but I get bonus privileges for having a mortgage (instead of a lease) on my residence. I have a thrice-divorced sister with two kids still at home whose income derives from cleaning other people's houses. She pays about double every month for her leased house, and she doesn't get my tax breaks.

There is a tremendous amount of privilege built into the system, and you're right, TR, that so much of it is NOT fair. I, for one, don't mind the subsidies offered to my colleagues who are raising children - they're the ones who are making a real contribution to society.

Anonymous said...

Another issue I would like to raise is immigration. The process I went through with my German-born husband was exceedingly annoying and undignified. The hoops we had to jump through to prove that our marriage was "real" were quite a shock to me. Still, we prevailed, and he is now a permanent legal resident. I can't imagine how hellish such a process might be if you are gay.

LouMac said...

@Anonymous 7:16.
"Still, we prevailed, and he is now a permanent legal resident."

Well, of course you prevailed. The process may have been annoying, intrusive, offensive, etc., but the whole immigration system is set up to support the hetero nuclear family structure. Plus, your husband is German. If he's also white and able-bodied, there are more bonus points.

Same-sex couples are not recognised at ALL in current immigration policies. I'm sorry if the process was shocking to you, but you're comparing apples and oranges. I get annoyed when hetero allies, with the best of intentions, try to make us feel better by saying "well I've suffered too, I know how it feels." Recognise your privilege, work for change, and stop claiming experiential solidarity.

LouMac said...

Apparently I'm feeling cranky today, but this annoyed me too: @Liz, "my colleagues who are raising children - they're the ones who are making a real contribution to society."

Seriously? The "real" contribution? Sure, parents for the most part make *A* contribution, a huge one. I also agree that there is something particular about raising kids that justifies extra societal help. But let's not get into the unhelpful binary judgment of "real" versus "trivial".


My single, intentionally childless friend, who single-handedly set up and runs a local non-profit, is making just as "real" a contribution to her world.


If it's a collective good to produce more humans, then it must also, logically, be a collective good to BE a human. I mean, the idea behind kids-are-the-future rhetoric in the first place is that kids will grow up to be "productive members of society" (by contributing work or products of some kind.) Well, what happens to those kids who grow up and are now busy being productive members of society? Do they fail to actually count as "really" productive until they have more humans, who will then grow up to be productive members of society (except that they won't be productive until they themselves have kids and .... well, you get the vicious circle.)

Some people raise wonderful children who are a boon to our world - but those kids are not valuable *only* inasmuch as they will one day have their own kids. And therefore, their parents are not valuable only because they *have* had kids.

Anonymous said...

@LouMac - I got the impression from Anon's posting that she WAS recognizing her privilege, which was part of her point. I'm mentioning this not to nit-pick your comment, but because for the hetero community to realize the point that TR (and other posters) is making it needs to recognize its own privilege. Immigration stuff is a great way to shake up white-straight folks because it's one of the few times they are treated like potential criminals and they are helpless. While the system is certainly set up for the advantage of hetero-married white couple from the "right" countries, it is still an arbitrary and scary experience. The outcome is *not* inevitable (we for example got a "your file is closed and claim rejected" letter for failing to appear to an appointment we were never notified for). One might say, Yeah welcome to everyone else's world! But again, that's the point. It would be nice if the privileged could just GET IT, but sometimes they need be taken out of privilege (at least in a small way) to get it. As TR says, most married folks don't understand why it's fundamentally wrong to structure our legal/social system around marriage (I would argue, even with gay marriage legalized); they can't see it because it's so seamlessly integrated into their lives and they benefit so much from it.

We were fundamentally uncomfortable with the idea of getting married, but ended up doing so in order to keep my partner in the country. Once we got married, we were actually sickened by the sudden privilege it bestowed on us, and we saw it clearly on every level (legal, tax, social, health insurance, etc). I'm all for a marriage-free world - and that includes civil unions because civil unions are just marriages without churches. Let's have citizenship and insurance and taxes and property ownership without marriage. I completely agree w/redbookish's idea of recognizing ALL kinds of relationships, not just sexual ones.
-Perpetua

FrauTech said...

Spot on TR. Though to be fair I now pay more to actually file my taxes. My state lets you file free if you make under a certain amount, but does not compensate for two quazi-equal earners. I think that just penalizes joint-filers in general though and favors situations where there is a single earner.

Other than that...it was tremendously easy to change my name after I got married (yeah yeah yeah, my name, my choice, ok?), incredibly easy to get a marriage license. My company offers same-sex benefits but it was super easy for me to add my opposite gender spouse to my benefits. The state/the feds/my mortgage all recognize us as being "husband" and "wife". I got married and everything will automatically go to him, I did not need to set up a trust or anything else. Even if my father is still listed on old retirement account information as my beneficiary, the law will automatically favor my husband as my inheritor. We're both automtically entitled to social security survivor benefits in the event something happens, if one of us were in the military the other would be entitled to the other person's retirement etc, I don't have to worry about my life insurance not going to him in the event something happens to me.

The only thing that's irritating is maybe how much tax laws favor buying a home and having kids. Though the home doesn't benefit you too much until you hit a certain income, but kids are like free tax dollars coming back your way. Other than that, I'm pretty set with Uncle Sam. I like AcadeMama's "enlightenment" and hope there's still enough strength for a social movement and a better society even with the clay feet of our politicians.

Token Straight Breeder said...

I very specifically avoided taking societal credit for generating my kids. In terms of consumption of resources and increasing the carbon footprint I am responsible for, it was the single most selfish thing thing I have ever done.

But as long as my partner and I made that choice, civilizing the beasties and making them thoughtful, productive members of society is a societal good, which I think most people would agree that the govt can choose to support -- but should do so equitably for all who actively raise children.

I must admit that I do get crabby at all those senior discounts that go to those who are well off as well as those who are struggling, while there are kids starving undiscounted.

Why does living long enough to collect your retirement entitle you to even more goodies?

But I guess I've gone off topic . . .

Kimberley said...

I just received my TIAA-CREF letter. I am outraged. I went to the web to see who else is outraged and came across Tenured Radical. Thanks for articulating the gross inequities and illegal maneuverings.
I am ready to take action -- why have TIAA CREF decided now to make this determination? As a heterosexual married person, I'd like to join with others to threaten to withdraw and invest in a retirement program that does give equal benefits to same-sex couples-- regardless of the state they live in-- unless they reverse this decision.
Where is the pressure coming from to make this policy? Why are they succumbing?

Anonymous said...

Thank god I am out of TIAA-CREF and into the (admittedly dying) UC pension plan, where my partner can inherit.

But with that said, I'm completely on the side of disestablishing marriage. Make it a religious blessing and allocate benefits on the basis of citizenship, residency, or whatever.