Same-Sex Marriage Recognition and Taxes: New Evidence About the Impact of Household Taxation

The U.S. and state tax codes encourage marriage for some couples and discourage marriage for others, but same-sex couples were only recently exposed to these marriage incentives. Using the American Community Survey, which has the advantage of reporting cohabitation as well as marriage, we provide new estimates of the effect of taxes on marriage by leveraging variation created initially by state same-sex marriage legalization, followed by the United States v. Windsor Supreme Court ruling, followed by the Obergefell v. Hodges ruling. We estimate a significant marriage elasticity that is similar in magnitude to the few well-identified estimates for different-sex couples. Our estimates suggest that the 2018 Tax Cuts and Jobs Act, by virtue of diminishing average marriage penalties, would increase the propensity of most high-earning cohabiting couples to marry.