Wednesday, April 01, 2009

Blatant Discrimination

I work for a great company - we're casual almost every work day of the year, we leave at 3 on Fridays (noon on a Holiday weekend if we're caught up), and have off every Bank holiday. Life doesn't get much better. Recently, I asked the Big Boss about domestic partnership benefits. His response: yes, we can offer that. Question asked, answer received and life is good until . . . a little research turns up the following:

Taxation of Domestic Partner Benefits

When an employer provides health insurance for the spouse or dependents of an employee, federal tax law allows the value of the health insurance coverage to be excluded from the employee’s gross income.
But when an employer provides the same health insurance coverage for the domestic partner or the dependents of the domestic partner of an employee, federal tax law considers the fair market value of that coverage, including the employee's pre-tax contributions, as "imputed income" to the employee. According to a December 2007 report by the Center for American Progress and the Williams Institute, employees with partner health benefits now pay on average $1,069 per year more in taxes than would a married employee with the same coverage. The only exception is when a domestic partner qualifies as a dependent of the employee under IRS definitions.

Additionally, employees cannot use pre-tax dollars to pay for a domestic partner's coverage, precluding them from the full benefits of a Flexible Spending Account, Health Reimbursement Account or Health Savings Account.

Because the imputed income increases the employee's overall taxable income, it also increases the employer’s payroll taxes - the Social Security and unemployment insurance tax that employers pay based on employees’ taxable incomes. According to the same CAP/Williams Institute report, employers pay a total of $57 million per year in additional payroll taxes because of this unequal tax treatment.

As a result, gay, lesbian, bisexual and transgender individuals that secure employer-provided health insurance coverage for themselves and their unmarried partners face a significant tax penalty; one that, depending on the individual, can be in the thousands of dollars per year and result in the individual paying upwards of 50% more in federal taxes. Meanwhile, employers that extend partner health benefits pay higher payroll taxes and face the administrative burden of maintaining separate payroll functions for income tax withholding and payroll taxes.

So, because I'm gay and have a domestic partner, I have to pay upwards of 50% more in federal taxes. Discriminatory??? Hell, Yeah! Legal? Unfortunately. How is it, in 2009, such discriminatory practices are allowed? Oh, wait, it's because I'm homosexual. How stupid of me not to realize that the genetics of my birth would one day affect my paycheck!!!! How stupid of me to think in 2009 (yes, I know all the multitudes of facts against the statement I'm about to make) we would live in an enlightened society!!!! 50% more in federal taxes because I'm a gay man in an - almost - 15 year committed relationship with a man who is an integral part of my life and the government obviously thinks this is a good thing.

Well, it's not a good thing. It's CRAP. If my heterosexual co-workers do not have to pay taxes on imputed income to have their spouses covered under the company health plan, then neither should I . . . or any person in the free world.

So, what did I do about this little tidbit of information gleaned from I sent a message to the White House. Yes, I did. I also sent a message to HRC for clarification. Yes, there is legislation in the works to correct this horrendous WRONG that exists in our society. Yes, people have been working on this for years now. To date, the problem still EXISTS; therefore, with our new President in office, I sent a message to the White House to voice my concern. Yes, the economy sucks right now and we need to solve that crisis, but that in NO WAY means that obviously discriminatory practices should be allowed to coast along.

Discrimination needs to be abolished.

Equality should exist across the board, no matter whether a person is homo/hetero-sexual. My love for a man who worships the quicksand I walk upon should not incur me 50% more a year in federal taxes because I want to share my health benefit plan with him. My company should not have to impose such taxes on me because they stand up for equality. I should not have to be stressed out at the end of a day because of imputed income and have to rely on one of the Three Sisters of the Order of Maintaining Sanity - Sister Merlot, Sister Cabernet, and Sister Margarita!