The Labor Supply and Tax Revenue Consequences of Federal Same-sex Marriage Legalization
65 National Tax Journal 783-806 (December 2012)
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.