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The Labor Supply And Tax Revenue Consequences Of Federal Same-Sex Marriage Legalization

  • Stevenson, Adam

This paper estimates the effects of same-sex marriage legalization on federal income tax revenue using changes in taxation generated from the 2003 Jobs and Growth Tax Relief Reconciliation Act. These estimates rely critically on the responsiveness of labor supply and marital choice to changes in the tax code. In addition, this paper proposes a novel measure of the marriage penalty that incorporates the fact that individuals will respond optimally to changes in marginal tax rates within the household. The estimates suggest that legalization will result in a small gain, around $34 million per year, in federal income tax revenue.

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Article provided by National Tax Association in its journal National Tax Journal.

Volume (Year): 65 (2012)
Issue (Month): 4 (December)
Pages: 783-806

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Handle: RePEc:ntj:journl:v:65:y:2012:i:4:p:783-806
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  1. Fisher, Hayley, 2011. "Marriage penalties, marriage, and cohabitation," Working Papers 2011-12, University of Sydney, School of Economics.
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  16. Berliant, Marcus & Rothstein, Paul, 2003. "Possibility, Impossibility, and History in the Origins of the Marriage Tax," National Tax Journal, National Tax Association, vol. 56(2), pages 303-17, June.
  17. Thomas F. Crossley & Sung-Hee Jeon, 2007. "Joint Taxation and the Labour Supply of Married Women: Evidence from the Canadian Tax Reform of 1988," Fiscal Studies, Institute for Fiscal Studies, vol. 28(3), pages 343-365, 09.
  18. LaLumia, Sara, 2008. "The effects of joint taxation of married couples on labor supply and non-wage income," Journal of Public Economics, Elsevier, vol. 92(7), pages 1698-1719, July.
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  20. Nada Eissa, 1995. "Taxation and Labor Supply of Married Women: The Tax Reform Act of 1986 as a Natural Experiment," NBER Working Papers 5023, National Bureau of Economic Research, Inc.
  21. David S. Johnson & Jonathan A. Parker & Nicholas S. Souleles, 2004. "Household Expenditure and the Income Tax Rebates of 2001," Working Papers 136, Princeton University, Woodrow Wilson School of Public and International Affairs, Discussion Papers in Economics..
  22. Edinaldo Tebaldi & Bruce Elmslie, 2006. "Sexual orientation and labour supply," Applied Economics, Taylor & Francis Journals, vol. 38(5), pages 549-562.
  23. Chinhui Juhn & Kevin M. Murphy, 1996. "Wage Inequality and Family Labor Supply," NBER Working Papers 5459, National Bureau of Economic Research, Inc.
  24. Alm, James & Badgett, M.V. Lee & Whittington, Leslie A., 2000. "Wedding Bell Blues: The Income Tax Consequences of Legalizing Same-Sex Marriage," National Tax Journal, National Tax Association, vol. 53(n. 2), pages 201-14, June.
  25. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695 Elsevier.
  26. Karen Leppel, 2009. "Labour Force Status and Sexual Orientation," Economica, London School of Economics and Political Science, vol. 76(301), pages 197-207, 02.
  27. Daniel Feenberg & Elisabeth Coutts, 1993. "An introduction to the TAXSIM model," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(1), pages 189-194.
  28. Alm, James & Whittington, Leslie A., 1996. "The Rise and Fall and Rise ... of the Marriage Tax," National Tax Journal, National Tax Association, vol. 49(4), pages 571-89, December.
  29. Paul J. Devereux, 2004. "Changes in Relative Wages and Family Labor Supply," Journal of Human Resources, University of Wisconsin Press, vol. 39(3).
  30. Kimmel, Jean & Kniesner, Thomas J., 1998. "New evidence on labor supply:: Employment versus hours elasticities by sex and marital status," Journal of Monetary Economics, Elsevier, vol. 42(2), pages 289-301, July.
  31. Juhn, Chinhui, 1992. "Decline of Male Labor Market Participation: The Role of Declining Market Opportunities," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 79-121, February.
  32. Eissa, Nada & Hoynes, Hilary Williamson, 2000. "Explaining the Fall and Rise in the Tax Cost of Marriage: The Effect of Tax Laws and Demographic Trends, 1984-97," National Tax Journal, National Tax Association, vol. 53(n. 3), pages 683-712, September.
  33. Sjoquist, David L. & Walker, Mary Beth, 1995. "The Marriage Tax and the Rate and Timing of Marriage," National Tax Journal, National Tax Association, vol. 48(4), pages 547-58, December.
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