State Ban on Same Sex Marriages Could Hurt Economy

Gay couples and businesses looking to recruit gay employees may see an economic incentive to move out of state.

By - Jul 29th, 2013 11:16 am
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Back in the 1980s, when I was starting out as a business reporter for the Milwaukee Sentinel, a juicy assignment came my way: examine the impact of Wisconsin’s taxes on the state’s economy. What I found was interesting, and in its own modest way, far-reaching: many well-off older people were leaving Wisconsin for Florida, and not just for its sunnier climes – Florida’s tax rates for both income and estates were much lower than Wisconsin’s. And to make the situation even more interesting, Badger state officials were being aggressive about trying to prove that Snowbirds, those with a second-residence in Florida, were claiming Florida residences as a sham. The tax folks did this by checking such things as where Snowbirds had bank accounts and what churches were listed on their tax forms as recipients of charitable deductions.

As a result, savvy Wisconsin lawyers and accountants were telling clients to sever all traceable ties to the Badger state, even if they were spending 5 months a year here. I spoke to folks who stopped giving to Milwaukee churches they had attended all their lives, closed all their Wisconsin bank accounts, quit civic clubs such as the Rotary and even got fishing licenses as Florida residents although they never cast a line. The Sentinel reprinted the resulting series as a pamphlet and in a few years, Wisconsin’s tax laws and policies were changed to make such legal and accounting advice less urgent.

I thought about all of this recently after the United States Supreme Court made its ruling that the federal government must recognize same-sex marriages.

The ruling leaves unclear many things, including the status for taxes and government benefits of same-sex couples who were legally married in a state such as Massachusetts but who now live in a state that does not recognize such unions, such as Wisconsin. A practical result of the decision is clear for Wisconsin – economically, it puts the state at a huge disadvantage. With the uncertainty around the real-life implications of the ruling in Wisconsin, savvy lawyers and accounts here will have to start echoing the advice they gave rich clients in the ‘80s, telling many gay couples that they would be better off financially living in a place like New Hampshire or Washington State that recognize same-sex marriage, or, if they want to stay in the Midwest, Iowa, which also does. Or, as of next month, Minnesota, which then will. Illinois, too, has a strong movement to legalize same-sex marriage.

The proximity to Wisconsin of Iowa, Minnesota and Illinois makes the Badgerland’s challenge even bigger. When it comes to employer-provided health insurance and Social Security benefits, gay couples will get a better deal in Des Moines, and soon Minneapolis, and perhaps even Chicago, than in Milwaukee or Madison. This is a strong incentive for a business looking to recruit employees nationally to locate outside of Wisconsin, for gay professionals to shun the state, or for a Waukesha gay couple approaching retirement to move. Many conservatives applaud Wisconsin’s marriage laws, just as they deplored the state’s tax laws in the ’80. Many liberals feel the exactly the opposite. But both sets of laws had the same effect — they encouraged people to leave the state or not even settle here. And that hurts us economically and socially.

This column originally aired on WUWM-FM’s “Lake Effect” show.

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7 thoughts on “State Ban on Same Sex Marriages Could Hurt Economy”

  1. jimspice says:

    MANY traditional (R) positions and policy are disincentives to move/stay: rejection of federal funds, women’s healthcare, elimination of safety net programs, refusal to design effective health exchanges, union busting, etc. etc. etc. That’s why the correlation between states that vote (R) and poor economic performance is almost perfect.

  2. Tyrell Track Master says:

    Great article! Just blows my mind that the Republicans can’t understand this.

  3. Gerry Coon says:

    The Wisconsin marriage amendment already has and will continue to hurt Milwaukee and Wisconsin economically. An island of discrimination will inevitably decline when surrounded by a sea of equality. Hopefully the citizens of Wisconsin and our elected officials will recognize this and correct this horrible injustice sooner rather than later.

  4. fightingbobfan says:

    The GOP puts everything on the altar of economic development including aid for the needy, but when it comes to currying favor with their fringe base, business doesn’t count.

  5. marksevelis says:

    Easy problem to solve, just initiate a new referendum to rescind the “one man one woman” marriage clause from our state constitution. You will find out that the inertia is difficult to overcome. I haven’t heard businesses complaining about this false problem espoused by left wing activists. Also, SCOTUS hasn’t finished yet. Chances are they will leave definition of marriage as a state’s right.

    How absurd your “thinking” is. If Wisconsin will lose business from homosexuals that means Wisconsin will gain more business from heterosexuals. That’s because Wisconsin prefers “real men and women.” Now, do you lefties see that your false argument is built on a false premise? Try converting your primitive reptilian brainstems into the brains that God has given to you–and think first.

  6. xskiier69 says:

    Without a shred of evidence, Urban Milwaukee columnist Avrum Lank makes a startling claim:

    A practical result of the [U.S. Supreme Court’s gay marriage] decision is clear for Wisconsin – economically, it puts the state at a huge disadvantage. With the uncertainty around the real-life implications of the ruling in Wisconsin, savvy lawyers and accounts here will have to start echoing the advice they gave rich clients in the ‘80s, telling many gay couples that they would be better off financially living in a place like New Hampshire or Washington State that recognize same-sex marriage, or, if they want to stay in the Midwest, Iowa, which also does. Or, as of next month, Minnesota, which then will. Illinois, too, has a strong movement to legalize same-sex marriage.

    In Lank’s own words, “with the uncertainty of the real-life implications of the ruling in Wisconsin,” the state will be at a “huge disadvantage.” How? Lank provides no clear evidence of any sort of “real-life” monetary disadvantage in Wisconsin as compared to states such as New Hampshire or Washington state.

    What would be the “real-life” cost of a move to, say, Washington state for a gay couple in Wisconsin–especially in an extremely tight job market? What would be the net reduction in income taxes by filing a joint tax return in Washington as opposed to separate filings in Wisconsin? Lank continues:

    When it comes to employer-provided health insurance and Social Security benefits, gay couples will get a better deal in Des Moines, and soon Minneapolis, and perhaps even Chicago, than in Milwaukee or Madison. This is a strong incentive for a business looking to recruit employees nationally to locate outside of Wisconsin, for gay professionals to shun the state, or for a Waukesha gay couple approaching retirement to move.

    What “real-life” data does Lank have to show that there would in fact be a net savings in such a move?
    This is a tremendous example of a conclusion completely unsupported by actual, “real-life” data or coherent, well-reasoned arguments.

    Sure, Wisconsin could be at a disadvantage, but without concrete numbers regarding the physical cost of relocation as compared with the tax advantages of legalized gay marriage in other states, Lank’s assertions are essentially meaningless.

    One would think a business reporter would know better

  7. Outdoors says:

    @Avrun Lank…..You have absolutely NO data to back your superfluous opimion that business will either leave or shun Wisconsin based on the gay laws. Show me demonstrative factual data…or stop irresponsible reporting.

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