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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. Edinaldo Tebaldi & Bruce Elmslie, 2006. "Sexual orientation and labour supply," Applied Economics, Taylor & Francis Journals, vol. 38(5), pages 549-562.
  2. Fisher, Hayley, 2011. "Marriage penalties, marriage, and cohabitation," Working Papers 2011-12, University of Sydney, School of Economics.
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  12. Sonia Oreffice, 2008. "Sexual Orientation and Household Decision Making. Same-Sex Couples’ Balance of Power and Labor Supply Choices," Working Papers 2008.81, Fondazione Eni Enrico Mattei.
  13. Robert Barsky & John Bound & Kerwin Charles & Joseph Lupton, 2001. "Accounting for the Black-White Wealth Gap: A Nonparametric Approach," NBER Working Papers 8466, National Bureau of Economic Research, Inc.
  14. 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.
  15. Thomas F. Crossley & Sung-Hee Jeon, 2006. "Joint Taxation and the Labour Supply of Married Women: Evidence from the Canadian Tax Reform of 1988," Social and Economic Dimensions of an Aging Population Research Papers 149, McMaster University.
  16. Paul J. Devereux, 2004. "Changes in Relative Wages and Family Labor Supply," Journal of Human Resources, University of Wisconsin Press, vol. 39(3).
  17. Richard Blundell & Thomas MaCurdy, 1998. "Labour supply: a review of alternative approaches," IFS Working Papers W98/18, Institute for Fiscal Studies.
  18. Singleton, Perry, 2011. "The Effect Of Taxes On Taxable Earnings: Evidence From The 2001 And Related U.S. Federal Tax Acts," National Tax Journal, National Tax Association, vol. 64(2), pages 323-51, June.
  19. James Alm & Leslie Whittington, 2003. "Shacking Up or Shelling Out: Income Taxes, Marriage, and Cohabitation," Review of Economics of the Household, Springer, vol. 1(3), pages 169-186, September.
  20. M. Lee Badgett & Gary Gates & Natalya Maisel, 2008. "Registered domestic partnerships among gay men and lesbians: the role of economic factors," Review of Economics of the Household, Springer, vol. 6(4), pages 327-346, December.
  21. 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.
  22. Karen Leppel, 2009. "Labour Force Status and Sexual Orientation," Economica, London School of Economics and Political Science, vol. 76(301), pages 197-207, 02.
  23. 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.
  24. 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.
  25. Richard Blundell & Alan Duncan & Costas Meghir, 1998. "Estimating Labor Supply Responses Using Tax Reforms," Econometrica, Econometric Society, vol. 66(4), pages 827-862, July.
  26. David S. Johnson & Jonathan A. Parker & Nicholas S. Souleles, 2004. "Household Expenditure and the Income Tax Rebates of 2001," NBER Working Papers 10784, National Bureau of Economic Research, Inc.
  27. Guido W. Imbens, 2003. "Nonparametric Estimation of Average Treatment Effects under Exogeneity: A Review," NBER Technical Working Papers 0294, National Bureau of Economic Research, Inc.
  28. Juhn, Chinhui & Murphy, Kevin M, 1997. "Wage Inequality and Family Labor Supply," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 72-97, January.
  29. Bradley T. Heim, 2007. "The Incredible Shrinking Elasticities: Married Female Labor Supply, 1978–2002," Journal of Human Resources, University of Wisconsin Press, vol. 42(4).
  30. 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.
  31. 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.
  32. 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.
  33. Francine D. Blau & Lawrence M. Kahn, 2007. "Changes in the Labor Supply Behavior of Married Women: 1980–2000," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 393-438.
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