Tax stuff I think is interesting. It is either copied from my primary blog on forbes.com http://www.forbes.com/sites/peterjreilly/ or stuff that I did not put there because being on forbes is a good gig and they have, you know, standards. Also some guest posts.
Saturday, August 23, 2014
Seventy Major Employers Line Up Against DOMA
Originally Published on forbes.com on November 4th,2011
Seventy employers, including giants such as Microsoft and Starbucks, have signed on as amiciin the case of Gill v OPM which challenges the constitutionality of Section 3 of the Defense of Marriage Act (DOMA). Also included in the amici are the cities of Boston, New York and Cambridge and Trillium Asset Managemet, a socially responsible investment manager. There are several prestigious law firms including Burns and Levinson. I didn’t notice any accounting firms on the list – so it goes. Section 3 of DOMA provides that for purposes of federal law, only opposite sex marriages are recognized. The federal district court for Massachusetts declared that portion of the act unconstitutional last year. The Justice Department determined that the act was indefensible, which aggravated conservatives including Newt Gingrich. Congress took up the defense of the act. The continued defense of the act actually creates a subsidy for gay marriage, an irony lost on everyone but me.
DOMA creates a few problems for employers in states like Massachusetts where same sex marriages are allowed under state law. The act creates unnecessary cost and administrative complexity and forces companies to discriminate. There are over 1,000 benefits of marriage under federal law, several of which are effectively delivered through employers. Among those are the exclusion for health insurance and the right to make a penalty free withdrawal from a 401-k for a spouse’s medical expenses. The brief cites a study that indicates that the average W-2 of the spouse with a same sex partner will, on average, show $1,069 more in federal tax than that of a similar employee with an opposite sex spouse. DOMA also complicates thehiring of highly skilled foreign employees since the employers cannot offer visas to same sex spouses.
The final concern in the brief was the way in which DOMA conscripts employers to become the face of its discrimination often in contradiction of corporate mission statements. The employer is forced to intrude on the employee’s privacy by inquiring as to the gender of the employee’s spouse and then treat them differently if they are same sex. But for the Supremacy Clause, this behaviour would be illegal discrimination under the laws of Massachusetts. There is a concern that employers will face lawsuits from having to navigate between the two systems.
If I was in charge of the vast right wing conspiracy, I’d definitely be ready to throw in the towel on this fight. The most ironic thing is that the argument against DOMA’s constitutionality is an argument that conservatives generally like – the 10th amendment. It has always been up to the states to decide who is or is not married. In the mean time same sex married couples, who filed as single in 2008, should be looking at whether a joint return should have been more beneficial. You have until at least April 2012 to file a refund claim, but give your accountant a break and take care of it now when things are a little slow.