Skip to main content

Gay Americans pay more taxes for fewer rights

By Suze Orman, Special to CNN
updated 9:01 AM EST, Mon February 25, 2013
STORY HIGHLIGHTS
  • Suze Orman: It is progress that a handful of states have legalized same-sex marriage
  • Orman: The federal government should make this basic civil right a law of the land
  • She says gay couples are penalized when it comes to taxes and Social Security benefits
  • Orman: When will our government end financial, social and civil discrimination?

Editor's note: Suze Orman is a personal finance expert and hosts "The Suze Orman Show" on CNBC. She is a bestselling author of ten books, including "The Money Class."

(CNN) -- That nine states and the District of Columbia have legalized same-sex marriage is encouraging progress for those of us who believe that everyone deserves to have basic civil rights. But, even if every state in the country could pass a similar legislation, it would not be enough. What we need is for our federal government to step up and make this basic right a law of the land.

Beyond the social discrimination, the refusal of our federal government to legally recognize same-sex marriages imposes steep financial penalties on same-sex couples. That two of the most costly penalties are triggered upon the death of one partner just adds to the ache of the senseless discrimination.

I have been with my partner, Kathy Travis, for 12 years. If I am lucky I will spend the rest of my life living and sharing my joys and happiness with her. We have worked very hard as a team to save for our future together and consider everything we have as equally owned by the other.

Suze Orman
Suze Orman

If the federal government recognized same-sex marriage, then when one of us dies our assets would seamlessly transfer free of tax to the survivor. That's a basic right that every heterosexual married couple has.

But because there is no federal recognition of same-sex marriage, if I die first, or vice versa, before either of us can inherit what is now jointly our assets, there would be a federal estate tax bill that one of us would currently have to pay. Again, to be clear: If we were a heterosexual married couple, there would be no estate tax regardless of the size of the estate or who died first.

Become a fan of CNNOpinion
Stay up to date on the latest opinion, analysis and conversations through social media. Join us at Facebook/CNNOpinion and follow us @CNNOpinion on Twitter. We welcome your ideas and comments.



This spring, the Supreme Court will weigh in on the constitutionality of the federal Defense of Marriage Act. The Court needs to do the right thing and end discrimination against gay couples.

We all have 83-year-old Edith Windsor to thank for in pushing the issue of same-sex marriage equality on to the national front. Edie and her partner Thea were together for 40 years. How many marriages do you know that have lasted that long? But when Thea died in 2009, Edie was hit with a $363,000 federal estate tax bill because as a same-sex couple they were not eligible for the unlimited marital deduction. Are we really a nation that says it is fair and just to demand Edie pay a $363,000 penalty because she is gay?

There's another penalty that's even worse. Regardless of the size of their estates, every gay couple is discriminated against when it comes to Social Security benefits.

Married heterosexual couples can maximize their Social Security retirement benefits by taking advantage of the highest-earner's benefit. When both spouses are alive, the lower earner can opt to collect a monthly benefit check that is equal to 50% of his or her spouse's benefit. For many married couples, that 50% spousal benefit is often much higher than what the lower-wage-earning spouse could collect based on his or her own earnings record. Most important, when the high earner dies, the surviving spouse is allowed to collect 100% of the deceased's higher benefit.

Because same-sex marriages aren't recognized on the federal level, gay and lesbian couples are not eligible for Social Security spousal benefits. The lower earner cannot claim any benefits based on the higher earner's benefit. A heterosexual couple married for just a few months is able to collect a federal benefit that same-sex couples who have been together for decades can't. Are we really a nation that says that is fair?

Beyond those two glaring death penalties, health insurance is another area of severe federal financial discrimination against gay couples. I am so glad to see more employers extending health insurance benefits to same-sex partners. But because same-sex couples are not considered legally married under the eyes of the federal government, the dollar value of the health coverage is considered taxable income.

A 2007 study estimated that this gay health insurance penalty costs same-sex couples an aggregate $178 million ($1,069 per household), while employers paid an additional $57 million in payroll tax on that taxable income. No heterosexual married couple or their employers pay that penalty. Again, are we really a nation that says that is fair?

The social and civil discrimination that persists as long as our federal government does not recognize same-sex marriage is inexcusable. Add in the financial discrimination gay and lesbian couples face and the current policy becomes all the more indefensible.

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Suze Orman.

ADVERTISEMENT
Part of complete coverage on
updated 5:45 PM EDT, Fri August 22, 2014
It apparently has worked for France, say Peter Bergen and Emily Schneider, but carries uncomfortable risks. When it comes to kidnappings, nations face grim options.
updated 8:31 AM EDT, Fri August 22, 2014
James Dawes says calling ISIS evil over and over again could very well make it harder to stop them.
updated 12:17 PM EDT, Sat August 23, 2014
John Bare says the Ice Bucket Challenge signals a new kind of activism and peer-to-peer fund-raising.
updated 6:31 PM EDT, Fri August 22, 2014
As the inquiry into the shooting of Michael Brown continues, critics question the prosecutor's impartiality.
updated 6:47 PM EDT, Fri August 22, 2014
Newt Gingrich says it's troubling that a vicious group like ISIS can recruit so many young men from Britain.
updated 8:23 AM EDT, Fri August 22, 2014
Retired Lt. Gen. Mark Hertling says he learned that the territory ISIS wants to control is amazingly complex.
updated 10:50 AM EDT, Thu August 21, 2014
David Weinberger says Twitter and other social networks have been vested with a responsibility, and a trust, they did not ask for.
updated 7:03 AM EDT, Fri August 22, 2014
John Inazu says the slogan "We are Ferguson" is meant to express empathy and solidarity. It's not true: Not all of us live in those circumstances. But we all made them.
updated 3:51 PM EDT, Wed August 20, 2014
Cerue Garlo says Liberia is desperate for help amid a Ebola outbreak that has touched every aspect of life.
updated 1:42 PM EDT, Thu August 21, 2014
Eric Liu says Republicans who want to restrict voting may win now, but the party will suffer in the long term.
updated 11:38 AM EDT, Thu August 21, 2014
Jay Parini: Jesus, Pope and now researchers agree: Wealth decreases our ability to sympathize with the poor.
updated 8:00 AM EDT, Thu August 21, 2014
Judy Melinek offers a medical examiner's perspective on what happens when police kill people like Michael Brown.
updated 6:03 PM EDT, Tue August 19, 2014
It used to be billy clubs, fire hoses and snarling German shepherds. Now it's armored personnel carriers and flash-bang grenades, writes Kara Dansky.
updated 1:27 PM EDT, Wed August 20, 2014
Maria Haberfeld: People who are unfamiliar with police work can reasonably ask, why was an unarmed man shot so many times, and why was deadly force used at all?
updated 5:52 PM EDT, Mon August 18, 2014
Ruben Navarrette notes that this fall, minority students will outnumber white students at America's public schools.
updated 5:21 PM EDT, Tue August 19, 2014
Humans have driven to extinction four marine mammal species in modern times. As you read this, we are on the brink of losing the fifth, write three experts.
updated 4:06 PM EDT, Mon August 18, 2014
Pepper Schwartz asks why young women are so entranced with Kardashian, who's putting together a 352-page book of selfies
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT