(c) by Mary Griggs
I came onto Facebook this morning and saw this picture on a friend’s wall:
Beyond the fact that our economy is improving under President Barack Obama and with US military spending dwarfing the rest of the world making conquest laughable at best, what I take most issue with is the failure to understand that social issues are economic issues.
Even Forbes has written about a review of the last 80 years of economic history which show the laissez faire policies of Republican Presidencies had far less benefits than expected, and in fact produced almost universal negative economic outcomes for the nation.
I touched on this from a women’s health perspective in an earlier blog post (Women’s Health IS An Economic Issue!) and will now expand on some pretty specific ways that LGBT social issues are economic issues.
Here are some basic statistics on the impact of discrimination.
While LGBT persons tend to have more education on average than the general population, evidence suggests that they make less money than their heterosexual and cisgender counterparts (Factor and Rothblum, 2007; Fassinger, 2007; Egan, Edelman, & Sherrill, 2008). Studies on income differences for LGBT persons indicate that:
- Gay men earn up to 32 percent less than similarly qualified heterosexual men.
- While 5.9 percent of the general population makes less than $10,000, 14 percent of LGBT individuals are within this income bracket.
- Up to 68 percent of individuals identifying as LGBT report experiencing employment discrimination.
- Termination of an employee based on sexual orientation remains legal in 31 American states and termination based on gender identity remains legal in 39 American states.
The consequences of youth homelessness have many implications for the socioeconomic status of LGBT youth (Ray & National Gay and Lesbian Task Force, 2006). Studies on LGBT youth reveal the following:
- Studies indicate that between 20 and 40 percent of all homeless youth identify as lesbian, gay, bisexual, or transgender.
- Upon coming out to their parents, 26 percent of LGBT people report being kicked out of their homes and being without economic support (Cochran, Stewart, Ginzler, & Cauce et al., 2002).
- Homeless LGBT youth miss out on education and social support during critical formative years (Milburn, Ayala, Rice, Batterham, & Rotherham-Borus, 2006). For these reasons, LGBT youth often start at the lower rungs of the socioeconomic status ladder and are more likely to remain there in the future.
Beyond the statistics are the economic consequences in how LGBT relationships are treated.
Most heterosexuals take for granted that they can add a spouse or children to their employer’s health plan. LGBT employees with partners have that option only if they work for an organization that offers domestic partner coverage. Only 22% of American employers, including 53% of Fortune 500 companies, extend health insurance benefits to the same-sex partner of an employee (see “Unequal Taxes on Equal Benefits,” The Williams Institute).
Even when the coverage is available, it costs LGBT couples more because they are taxed on the value of those benefits. Employers must report the value of the benefits provided to the domestic partner as income on the employee’s Form W-2. Some companies (Bank of America, Google, Cisco Systems, Facebook, Discovery Communications, etc) recognize this a fairness issue and, to offset the tax cost on imputed income, they “gross up” the employee’s salary so that the net pay is equal to that of an identically salaried married employee.
The benefits of income splitting enjoyed by most married heterosexual couples via the joint return filing option is not generally available for same-sex partners on their federal returns. However, same-sex couples registered as domestic partners in California, Nevada and Washington (or married in California during the period such marriages were legally recognized, between June 16, 2008, and Nov. 5, 2008) must split their income on separate returns, due to the combination of community property laws and state legal recognition of property rights under domestic partnerships, including homosexual unions. Pursuant to informal guidance issued in 2010, the IRS now requires couples in these states to report 50% of their combined community income on each spouse or domestic partner’s individual federal return (see Private Letter Ruling 201021048, Chief Counsel Advice 201021050; IRS Publication 555, Community Property posted on the IRS website).
The unlimited marital deduction is not available for same-sex couples, therefore, gifts above $13,000 are subject to the gift tax. A taxable gift may result if one partner contributes over $13,000 more than the other partner to common expenses. Sharing of assets can also trigger a gift tax. If a partner owning property puts the other partner on the deed as a joint tenant with right of survivorship, a gift has occurred.
Social Security benefits are not passed on to surviving domestic partners. In some cases, IRA and 401(k) accounts can be rolled over. IRS Publication 590, Individual Retirement Arrangements (IRAs), states that proceeds may pass to a nonspouse beneficiary via a trustee-to-trustee rollover “as long as the IRA into which amounts are being moved is set up and maintained in the name of the deceased IRA owner for the benefit of [the nonspouse] as beneficiary.”
Under federal law, estates inherited by the surviving spouse are not subject to the estate tax. Because of DOMA, the federal government requires LGBT couples to pay an estate tax — the “gay tax,” Edie Windsor calls it.
On the issue of how transphobia impacts the economy, there is a study by Jody L. Herman entitled “The Cost of Employment Discrimination against Transgender Residents of Massachusetts,” that found that discrimination against the state’s approximately 33,000 transgender residents costs the state millions of dollars each year. According to the study, “[n]ot only does the Commonwealth suffer lost income tax revenue because of discrimination, but each transgender person who loses a job may become eligible for programs that will cost the state hundreds or thousands of dollars.” These programs include housing assistance, work-related programs, and public-assistance expenditures to replace lost income and insurance coverage.
The National Transgender Discrimination Survey found that transgender people also face discrimination in housing, healthcare, and education, to name a few areas. Discrimination this pervasive comes at a tremendous cost not only to the individuals facing it, but also to society as a whole.
At a time when the economy is struggling and many are calling for drastic cuts in government spending, such blatant and pointless discrimination hurts all of us, from those impacted directly to those helping to bear the burden of the societal costs.
As much as Mitt Romney and his surrogates try to keep the focus on their economic priorities, none of us should forget that Mitt Romney has signed the NOM Marriage pledge and has committed his administration to enshrining the economic disparities and discriminations listed above into our constitution, to appointing federal judges who don’t support a right to same-sex marriage, and to vigorously defend the Defense of Marriage Act in court.
As I’ve pointed out in this post, you don’t have to be an economist to see that isn’t revenue neutral.