The Labor Supply and Tax Revenue Consequences of Federal Same-Sex Marriage Legalization

Stevenson, Adam (2012): The Labor Supply and Tax Revenue Consequences of Federal Same-Sex Marriage Legalization.

Abstract

The issue of same-sex marriage legalization is increasingly part of the national political dialogue. This legalization would have a number of economic impacts, one of the most direct being a change in income tax payments, through the so-called marriage penalty. I estimate the effects of same-sex marriage legalization on federal income tax revenue. These estimates rely critically on the responsiveness of labor supply and marital choice to changes in the tax code. I present new evidence on both topics using changes in taxation generated from the 2003 Jobs and Growth Tax Relief Reconciliation Act. In addition, I propose a novel measure of the marriage penalty that incorporates the fact that agents will respond optimally to changes in marginal tax rates within the household.

• Item Type: MPRA Paper
• Language: English
• Keywords: labor supply, marriage penalty, sexual orientation, DOMA
• Subjects: H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H24 - Personal Income and Other Nonbusiness Taxes and Subsidies; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J22 - Time Allocation and Labor Supply; J - Labor and Demographic Economics > J1 - Demographic Economics > J12 - Marriage ; Marital Dissolution ; Family Structure ; Domestic Abuse; D - Microeconomics > D1 - Household Behavior and Family Economics > D10 - General

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