taxation as a solution to the “gay marriage” issue

While I have some pretty strong personal views on the issue of “gay marriage”, I have a possible solution that not only gets it away from being a societal problem, but also gets the government out of being involved in our personal lives a little more. There is a side benefit of being able to return the entire concept of “marriage” back to the individuals involved in the marriage itself.

Instead of looking at this through the [valid] lens of religion (of any kind), let’s look at it through the lens of economics.

Instead of having the government be in the business of certifying and approving marriages, let’s put them back to the role they should have – which is overseeing contracts. And instead of tax, inheritance, health, and benefits laws being tied to whom you marry, let’s tie them to those you economically support and/or with whom you enter into a contract of mutual support.

No more marriage licenses. No more weddings before a magistrate or justice of the peace. Weddings can go back to being the religious ceremonies they have been for centuries, and for those who prefer a non-religious ceremony, a contract of mutual support can be granted.

How could this look from a taxation perspective?

First, let’s throw-out the different type of filing, and simplify:

  • Single taxpayer
  • Taxpayer with dependents (where a “dependent” is defined as someone who receives at least 51% of their core sustenance (housing, food, clothing) from the non-dependent)
    • Minor (under 18) Dependents
    • Other Dependents
      • Primary Dependent
        • An individual who has entered a contract of mutual support with the Single Taxpayer and who resides at the same address, or
        • The only dependent over 18 in the Household
      • Secondary Dependents
        • Other members of the Household who reside at the same address

I am simplifying, but will also give the option annually to change your filing status if it gives a more advantageous overall benefit to your family / living arrangement.

Untaxable Income (or, the prebate):

  • Single Taxpayer
    • $6000 annually
  • Single Taxpayer with Dependents (ie Household)
    • $6000 plus
      • $3600 per Minor Dependent (under 18)
      • $6000 for the Primary Dependent (over 18)
      • $5400 per Secondary Dependent (over 18)
    • if a Dependent earns more than the Single Taxpayer Untaxable Income Level ($6000), they may file as a Single Taxpayer or contribute their income to the Household and only a file a Contributor income tax return

Tax rates:

  • 20% on income per Taxpayer after Untaxable Income is eliminated
  • 3% federal sales tax on all first-time, end-use purchases from a business (ie not purchased for resale by a business and not resold in a secondary market such as a garage sale or eBay)

Definitions:

  • Contract of Mutual Support
    • A legally-binding document of either a permanent or time-limited nature in which two adults enter to establish a Household
  • Dependent
    • Any resident of the same Household whom receives more than 51% of their core sustenance (housing, food, clothing) from the Single Taxpayer
  • Household
    • A single taxable unit or those related to each other (either by blood, adoption, religious marriage, or Contract of Mutual Support), residing at the same address and combining their incomes and together for the betterment of the group
  • Income
    • Any money earned via any legal or illegal means including but not limited to:
      • Bonus
      • Capital Gains
      • Dividends
      • Gifts/Inheritance from outside the United States
      • Interest
      • Rent
      • Salary
    • Exclusions to taxable Income are all sources of money earned via secondary markets or personal gifts, including but not limited to:
      • Garage sale proceeds
      • Personal services on an ad hoc basis (eg mowing a neighbor’s lawn)
      • Gift/Inheritance from inside the United States from a Taxpayer
  • Single Taxpayer
    • Any person who has earned Income in the United States or has received a Gift/Inheritance from outside the US while residing in and earning Income in the US
  • Untaxable Income
    • A subsistence-level income needed for basic living

Examples:

  • Single Taxpayer earning $50000/yr Salary only
    • Subtract $6000 as Untaxable Income
    • 20% * $44000 pays $8800
  • Single Taxpayer earning $50000/yr Salary and $500/mo Rent
    • Subtract $6000 as Untaxable Income
    • 20% * ($44000 Salary + $6000 Rent) pays $10000
  • Single Taxpayer with Primary Dependent earning $50000/yr total
    • Subtract $12000 Untaxable Income
    • 20% * $38000 pays $7600
  • Single Taxpayer with 1 Minor Dependent earning $50000/yr
    • Subtract $9600 Untaxable Income
    • 20% * $40400 pays $8080
  • Household with Primary Dependent and 2 Minor Dependents earning $50000/yr
    • Subtract $19200 Untaxable Income
    • 20% * $30800 pays $6160
  • Household with Primary Dependent, Secondary Dependent, and 2 Minor Dependents earning $50000/yr
    • Subtract $24600 Untaxable Income
    • 20% * $25400 pays $5080

Further examples left as an exercise to the reader