\-\-\-\--Original Message\-\-\-\--

From: Art Engler
\[[[mailto:arthurengler@sbcglobal.net]{.underline}](mailto:arthurengler@sbcglobal.net)\]

Sent: Tuesday, March 15, 2005 6:03 AM

To: comments

Cc: field@hrc.org

Subject: Tax Reform

Arthur J. Engler, RNC, APRN, DNSc

Assistant Professor

University of Connecticut School of Nursing

Storrs Hall, Rm. 320

231 Glenbrook Rd., Unit 2026

Storrs CT 06269-2026

860-486-0573 (Phone)

860-486-0001 (Fax)

arthur.engler@uconn.edu

[[http://www.nursing.uconn.edu]{.underline}](http://www.nursing.uconn.edu/)

\"Life is not so short but that there is time for courtesy.\"

\- Ralph Waldo Emerson

13 Eastwood Rd.

Storrs CT 06268-2401

The President's Panel on Federal Tax Reform

1440 New York Ave., NW, Suite 2100\
Washington DC 20220

March 15, 2005

Dear Madam or Sir:

On January 7, 2005, President Bush announced the establishment of a
bipartisan panel to advise on options to reform the tax code to make it
simpler, fairer, and more pro-growth to benefit all Americans. I am
writing this letter to discuss how the reform is unfair to lesbian, gay,
bisexual, and transgendered (GLBT) people and their families.

 First, there are adverse tax consequences for same-sex couples:

1.  **Health Insurance for Partners - A Taxing Proposition:** Employees
    pay income and payroll tax on the health insurance premiums their
    employers provide for domestic partners who do not otherwise qualify
    as dependents. Benefits for different-sex spouses are not subject to
    this tax.

2.  **Flexible Spending Accounts Not So Flexible:** Employees can use
    flexible spending accounts to pay for a different-sex spouse\'s
    medical expenses, including eyeglasses, prescriptions, and co-pays,
    on a pre-tax basis. These accounts cannot be used for a same-sex
    partner, or even a same-sex spouse.

3.  **Retirement Savings - Death and Taxes:** Tax treatment of
    retirement savings, such as those found in 401(k) plans, privileges
    spouses and penalizes same-sex couples. This means that on the death
    of a partner, the surviving partner is left not only with the same
    emotional loss that a different-sex spouse experiences, but also
    with an unfair tax bill. This is problem is made even more acute by
    the fact that same-sex couples are denied survivors\' benefits under
    Social Security, even though they pay the same payroll taxes as
    heterosexual workers.

4.  **Estate and Gift Taxes - Strangers Under the Law:** Different-sex
    spouses get a complete exemption from estate and gift taxes. But
    same-sex partners, even ones who are married in Massachusetts or
    parties to civil unions in Vermont, are treated as strangers under
    the tax code. So when a partner dies, their estate is subject to
    taxation.

Second, there are adverse consequences of the social security reforms
proposed as well for same-sex couples:

1.  **Equal Contribution, Unequal Benefits:** All GLBT people pay into
    Social Security on an equal basis with their heterosexual
    counterparts, but are not eligible for equal benefits.

2.  **No Survivors\' Benefits:** Same-sex partners do not receive
    survivors\' benefits when a partner dies, even though they pay for
    them equally.

3.  **No Disability Benefits:** Same-sex partners are not eligible for
    spouse\'s benefits when a partner becomes disabled, even though they
    pay equally into the program.

4.  **Children Are Left Unprotected:** Sixty percent of children being
    raised by same-sex couples live in a jurisdiction where
    second-parent adoption is unavailable, meaning that these children
    cannot secure a recognized legal relationship with one of their
    parents. When a parent dies without such a legal relationship, the
    surviving child is not eligible for surviving child benefits under
    Social Security, even though the deceased parent paid into the
    program, and even if the parent supported the child for her whole
    life.

5.  **Even When a Child is Legally Adopted by Same-Sex Partner, Benefits
    are STILL Unavailable:** Social Security provides \"surviving
    parent\" benefits to the parent caring for a minor child when the
    other parent dies. But all children raised by same-sex couples are
    excluded from this benefit, even though their parents pay equally
    into Social Security, because it is only given to couples who are
    recognized as \"spouses\" under federal law, which same-sex couples
    are not. Even though the benefit is for children and not spouses,
    children being raised by GLBT people are denied it because their
    parents cannot marry. Unmarried couples pay taxes on their
    partner\'s health insurance that is provided by their employer

> Third, same-sex couples cannot use their flexible medical accounts for
> their partner\'s medical costs, retirement benefits for their partner
> will be taxed higher than a married couple, and children of same-sex
> parents may not be recognized as dependents for tax purposes.
>
> I hope you find these comments helpful in your work.
>
> Yours truly,
>
> Arthur J. Engler
>
> Cc: Human Rights Campaign