Gay Marriage and Obamacare

A federal appeals court in New York ruled against the Defense of Marriage Act yesterday, setting the stage for the constitutionality of law to be reviewed by the Supreme Court.

The opponents of the 1996 law are full of hope that the court will strike it down.  In the first place, the four liberal judges will quite clearly find it unconstitutional, leaving Justice Anthony Kennedy with the deciding vote.  Kennedy wrote the opinion in Lawrence v. Texas, which struck down anti-sodomy laws, so it’s not irrational to anticipate Kennedy striking down the Defense of Marriage Act.

The opponents of the law also believe they have very strong facts on their side in this case. I think they’re wrong about this, for reasons related to the recent Obamacare decision that I’ll explain in a moment.

The plaintiff, Edith Windsor, is obviously a sympathetic character. She’s an 83 year-old lesbian who married her partner of 40 years, Thea Spyer, in Canada in 2007.  At the time, the state of New York did not yet allow same sex marriages to be performed but it did recognize out of state same sex marriages.  (Last year, the Marriage Equality Act was voted into law, legalizing in-state same sex marriages in New York.)

When Spyer died in 2010, the Internal Revenue Service contended that Windsor could not claim a spousal deduction for the federal estate tax because the Defense of Marriage Act prohibited the federal government from recognizing the marriage, even though the couple were married under New York law. As a result, Windsor faced an estate tax bill of $363,053.

At first glance, this sounds like a pretty good case to bring against the Defense of Marriage Act. It would take a hard-hearted person to not feel sympathetic toward Windsor, whose loss of a lifelong companion the government greeted with a huge tax bill.  And the federal government’s refusal to recognize a marriage legal under New York law at least has an anti-federalism smell to it. 

At the very least, some Republican politicians will probably find it hard to oppose a case in which the plaintiff is aggrieved by a “death tax” and the federal government is encroaching on authority traditionally reserved for the states.  (On a personal level, let me say that I oppose the Defense of Marriage Act on the grounds that it federalizes marriage questions best left to the states.)

But the very fact that Windsor v. United States turns on a tax levied by the federal government may actually make it a very bad case for opponents of the Defense of Marriage Act.  Under the precedent of Chief Justice John Roberts’ opinion in the Affordable Care Act case, the tax connection may in fact save the Defense of Marriage Act.

The constitution grants Congress a broad power to “lay and collect Taxes” and courts have generally been very deferential to Congressional authority here.

Chief Justice Roberts found the that while a lot of 19th and 20th century case law demonstrated Congressional authority was not totally unlimited when it came to taxes, “more recently we have declined to closely examine the regulatory motive or effect of revenue-raising measures.”

For Obamacare, this meant that the constitutionality of the individual mandate could be upheld as an exercise of tax-power even if a direct mandate to purchase health insurance would have fallen outside of the scope of Congressional authority under the Commerce Clause.  The government, in other words, can further its goals through taxes even when it could not do so through direct regulatory command.

If the court applies this line of reasoning to the Windsor case, I think the Defense of Marriage Act survives constitutional scrutiny.  The court would decline to examine the “regulatory motive” for defining marriage as “a legal union between one man and one woman,” making claims about the discriminatory intent behind the Defense of Marriage Act inapplicable.  Even if disfavoring same sex marriage might be unconstitutional in many other contexts, in the case of taxes it might be upheld.

Many of the same elements that played into the Obamacare opinion apply here. Windsor isn’t facing any penalty other than a requirement to pay estate taxes. These could have been avoided through a marriage recognized by the federal tax code, just as the health insurance tax can be avoided by buying federally recognized health insurance. The feds aren’t going to jail you for getting gay-married, they just won’t give you (or any unmarried person) a tax-preference preference they’ve reserved for opposite-sex spouses.

As Chief Justice Roberts explained in the ACA case, “Put simply, Congress may tax and spend. This grant gives the Federal Government considerable influence even in areas where it cannot directly regulate.  The Federal Government may enact a tax on an activity that it cannot authorize, forbid, or otherwise control.”

It could be argued that the difference here is that Obamacare involved the Commerce Clause while this case turns on equal protection. The problem with this argument is that many provisions of the tax code are discriminatory in ways we find obnoxious in other contexts—and yet they are presumably constitutional. For example, we generally prohibit employers from discriminating on the basis of marital status. And yet this kind of discrimination is all over the tax code.

If it seems a bit odd to view the Windsor case through the lens of taxes, keep in mind that there would be no case at all if Congress hadn’t decided to tax estates. The entire case turns on Congressional authority to set the grounds for a revenue generating tax. If there were no taxable estate or no estate taxes, the Windsor case would not have arisen.

Note that an Obamacare based decision would be a very limited ruling. It would only apply to uses of Congresses taxing power. In other contexts, such the rights of non-citizen same-sex spouses, the Defense of Marriage Act wouldn’t have recourse to the Obamacare tax logic and might well be struck down.

I think the very narrowness of this kind of decision will be appealing to Justice Kennedy—and probably Roberts as well. Instead of having to decide a highly-politicized question with national effect, the case could be resolved on the narrow grounds of taxes. With the country moving quite obviously toward acceptance of same sex marriages, this would give the court the opportunity to allow the issue to be resolved politically instead of once again placing the court at the forefront of social change.

Of course, none of this might matter if a majority of justices agree with the Second Circuit that homosexuals are a “quasi-suspect” class justifying an intermediate level of judicial scrutiny. If that argument prevails, the Defense of Marriage Act is likely to fall. But its worth keeping in mind that the court—especially Kennedy— has avoided applying this kind of scrutiny in past cases, such as Lawrence, and may be hesitant to create such a doctrinal expansion now.

Even if I’m right about the taxing power argument here, I think the case is likely to undermine support for the Defense of Marriage Act. The facts on the ground—same sex marriage recognized in six states so far—have changed along with people’s attitudes.  The concept of same sex marriage is no longer as novel or foreign as it once was—which makes the nightmare scenarios of its legal recognition less plausible than they once were.

The case of the elderly lady facing an enormous tax bill despite her legal marriage to a long term partner is likely to strike many as the perverse and unintended result of the expansion of federal authority in this area.