July 3, 2013 at 8:00 pm EDT | by Mark Lee
Biz burden may speed fix to marriage complexities

Although anticipated, the victory was sweet when it came.

The Supreme Court’s 5-4 ruling last week striking down the 17-year-old Defense of Marriage Act blocking federal recognition of same-sex nuptials was cause for celebration.

Although only a limited and partial affirmation of marriage equality, the demise of DOMA will bring real relief to the estimated 130,000-plus same-sex married couples and the partners who will choose to wed. The decision also propels forward full civil equality for all LGBT Americans and conveys a palpable sense of inevitability to that effort.

Now comes the hard part. An elaborate process of revising federal rules will take time and cost business an inordinate amount of effort and money due the failure to declare marriage a constitutional right – as well as counseling caution for couples considering matrimony.

Worse, not everyone will be equal under the law, easily for a decade or longer.

Implementation of current circumstances will be complex. More than 1,100 federal marriage-related benefits need modification by a multiplicity of agencies overseeing massive manuals of government bureaucracy. A small number of critical revisions granting some of the most important benefits, likely affecting IRS and Social Security designations for those married but living in states that do not recognize those unions, may require congressional approval to change.

While federal intent to interpret the DOMA ruling to benefit the largest number of couples in the broadest measure was confirmed by President Obama last Friday, there are limits to White House executive authority. Fixing both federal and state laws will continue over the months and even years ahead, and will necessitate adjudicating legal challenges.

For businesses, the extraordinary burden and expense associated with administering a constantly evolving set of inconsistent rules will be massive. Tending to complicated regulatory schematics classifying different employees in varying locales in disparate ways has already created a new industry to provide guidance in the wake of the expected ruling.

Enterprise support has helped fuel the expansion of marriage equality among states. Business knows well the importance of equitable treatment for talent recruitment and employee satisfaction.

It won’t be long until divergent policy administration affecting private sector wages and benefits will lead to sharply intensified corporate calls for nationwide conformity on marriage. Government will hope to avoid suffering the anger of those tasked with arcane management of unequal application.

Over time, this will lead to reevaluation of state marriage laws based on economic competitiveness and encourage national reform toward a universal right to marry.

For many wed couples, especially among the preponderance of dual employed spouses with similar incomes at both lower and higher levels, the “marriage tax penalty” will significantly increase taxes owed. Many of the newly recognized betrothed will also enter higher tax brackets. Most will confront a number of additional financial concerns and complications.

For that reason, personal finance professionals counsel a “go slow” approach. Careful consideration of ramifications is becoming the new imperative. Acquiring marriage rights long taken for granted by heterosexuals requires thinking a little more like they have learned to do.

As gay District resident and Finesse Tax Accounting owner Michael Fine cautions, “single clients tend to make out better than married couples filing jointly in high-income places like D.C.” Although “never meddling in affairs of the heart,” Fine encourages couples contemplating marriage to first “know the implications and understand how to structure” a shared financial life before tying the knot.

He suggests that, for the moment, couples join with the community and “bask in the afterglow of a very significant victory” while recognizing that “it will take years to resolve the inherent discrimination embedded in the law.” Fine says the outcome on those specifics will be important to financial planning and that the interim “will be confusing and frustrating and difficult.”

Until marriage equality is fully embraced, that will remain true both in our homes and for business.

Mark Lee is a long-time entrepreneur and community business advocate. Follow on Twitter: @MarkLeeDC. Reach him at OurBusinessMatters@gmail.com.

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