Calif. seeks IRS tax equity for same-sex spouses

Source: Associated Press

The California Legislature has passed a resolution asking that same-sex spouses and domestic partners be taxed the same as heterosexual married couples.

The resolution, AJR29, asks the Internal Revenue Service to issue a ruling requiring individuals in a same-sex marriage or domestic partnership to each report half of their community income on federal tax returns.

... Democratic Assemblyman Mike Feuer says his resolution supports equality. Republican Assemblyman Chuck DeVore says it supports state sovereignty and allows states to set rules on family law.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/08/09/state/n173216D35.DTL&tsp=1

In 2009, United States Court of Appeals for the Ninth Circuit Judge Stephen Reinhardt declared DOMA unconstitutional in an employment dispute resolution tribunal, where the federal government refused to grant spousal benefits to Tony Sears, the husband of deputy federal public defender Brad Levenson.

And in another federal case it was declared unconstitutional:

On July 8, 2010, Judge Tauro issued his rulings in both Gill and Massachusetts, granting summary judgment for the plaintiffs in both cases. He found in Gill that Section 3 of the Defense of Marriage Act violates the equal protection of the laws guaranteed by the Due Process Clause of the Fifth Amendment to the U.S. Constitution. In Massachusetts he held that the same section of DOMA violates the Tenth Amendment and falls outside Congress' authority under the Spending Clause of the Constitution.<[br />

but still in effect?

Prior to the 1947 (I am going by memory and may be off a few years) Federal income tax was leveled ONLY on individuals. There was no "Married" returns. In states with Community property laws, both the husband and wife could claim 1/2 of the husband's income as their own. Thus instead of filing one Income Tax form, you filed two. The family income would be divided between both spouses. The Federal Income US Tax rates had always been progressive i.e. the higher the income the higher percentage you pay. If you cut your income in half by saying your spouse earned that income, you could cut taxes actually paid, sometimes by more then half (for example, if the tax rate is 0% for the first $10,000, 10% for income earned between $10,000 and $20,000, 20% for $20,000 to $30,000, 30% for $30,000 to $40,000... till you pay 90% over $90,000. Actual tax for someone earning $100,000 would be 0$ on the First $10,000, 10% on the Second $10,000 (or $1000), 20% on the next $10,000 (or $2000) and so forth. Total taxes would have been as follows: 0+1000+2000+3000+4000+5000+60000+70000+8000+9000 or a total of $45,000 out of the $100,000 income.

On the other hand if you lived in a Community property state you could split that income between both spouses, Total income would have been only $50,000 each. Taxes for each spouse would have been as follows:
$0+1000+2000+3000+4000 or a total of only $10,000 each or $20,000 for both. That is a substantial savings (Lesser AND Greater income would see a smaller percentage of savings, $100,000 in my example is where the widest affect of Community Property laws on Federal income tax could be seen).

Saving $25,000 by just having the STATE adopt a community property law lead to a movement to adopt community property laws among the states (One of the Reason Texas adopted community property law was for Federal income tax purposes). In 1947 Congress addressed this problem by permitting everyone in the US, in or not in a community property state, to split their income with their wives. Who is a wife is defined in the IRS Code and as a TAX CODE independent of DOMA.

One side affect of the above adopted of Married filing was if both the husband and wife earned similar incomes it was better for them to divorce and file as singles then as a married couple. This was the "Marriage Penalty" the GOP mentioned extensively in the 1980s and 1990s. In the 1990s Congress changed the law increasing the deductions for married couple to equal what it would be if both spouses were single. Just a word of warning, sometime a change may lead to other problems.

Just a comment that the Tax code defines who is a Married couple for Income Tax Purposes and a little bit of history on that definition.

Avoids the issue all together.