the gay ivy

Yale Forgot To Withhold Cash For Gay Staffers’ Tax Bill. With $16 Billion, Why Not Just Pay It?

While companies like Google and colleges like Syracuse University are footing the bill for the tax liability faced by the partners of gay employees who receive health care benefits, Yale University just showed its unwillingness to do so when a payroll error smacked gay staff and faculty with a surprise tax bill. Why not just pick up the tab, Mr. Gay Ivy?

You see, due to a computer programming error Yale failed to withhold the necessary cash from 61 gay employees to pay the federal taxes on their partners’ benefits for 2010, so the school notified them in a December letter that while Yale would front the cash to pay the tax bill for them in the immediate, the school would begin deducting the cost from the 61 staffers’ paychecks through the first three months of 2011.

Even though Connecticut recognizes same-sex marriage and thus treats shared health care benefits among gay partners the way it does married straight couples (read: tax-free), the federal government does not, thanks to DOMA. Yale erred by treating 2010 benefits as tax-free at both the state and federal level. But rather than use its own screw up as a moment to realize it could do something about the government’s discrimination and use some of its $16.3 billion endowment to foot the bill for gay staffers, it’s tacking on the additional taxes — which amount to thousands of dollars a year — to their 2011 pay checks.

Says a Yale spokesperson: The university “looks forward to a time when there is a federal recognition of same-sex marriage and civil union rights with respect to tax withholding rules.” I’m sure Yale staffers look forward to a time when the university realizes it can afford to right this injustice. If Syracuse can do it, with an endowment of just $850 million — or 5 percent of Yale’s — I can’t imagine why the Ivy leaguer in New Haven cannot. Especially because, holy crap, Yale is the gayest school in New England.

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  • earlbishop

    There can be a difference between what you and a health insurance company consider healthy. Some insurers will say that you have a health condition if you smoke, are overweight, are taking prescriptions, or had a medical condition in the past. If this describes you, you may want to search and read “Wise Health Insurance” on the web.

  • GuyDads

    Google started at Stanford University. But don’t look for “gay-friendly” Stanford University to spend any of their $13.8 Billion endowment to cover DOMA cost for gay staffers either.

  • ChicagoJimmy

    When I worked at Northwestern University they paid the additional taxes for my partner’s benefits. It was really cool. The non-profit I worked for before that tagged me with a tax bill at the end of the year for my partner’s health care benefit, so I was expecting the same thing at NU only to find they covered it for me.

  • Jaroslaw

    I hate to be the broken record, but does anyone have any idea how many people in this country have never worked, and spent their whole lives on the dole? How many unwed (and never wed) births we have in this country to those same folks? We forgive billions in child support because it will never be collected, makes the books look bad…. I could go on but you get the drift.

    YET, people who WORK get shafted? A very cursory look at history shows Gay folks have made far more than their share of contributions to every area of life relative to our small percentage of population. This pettiness makes me very annoyed.

  • SteveC

    Despicable behaviour by Yale!

  • divkid

    @Jaroslaw: i’m surprised. this from you. or i figured you all wrong.

    do you have those figures? i’d hazard it’s much fewer or is of much less economic significance than you’ve built this underclass threat to be in your nightmares.

    this is buying into the neoliberal fantasy of gap toothed rural banjo botherers and her inner city crack whore cousins, desperately pumping out children like aphids in order to drain the sap outta your slice of the american pie.

    it’s a conspiracy they’re working for your destruction. keep your eyes on them at all times!
    .and *not* but on corporate america and it’s welfarism, corruption, banking systems…etc. no its those undeserving poor once again. you need a plan.

    sterilisation? eugenics?

    seems like an awfully convenient off the shelf bogeyman to me.
    your better than this.

  • John

    I am a bit baffled why people would think that Yale, or any enterprise, should pick up the tax liability for gay employees. How is it fair that company money is given to gay employees and not to the straight employees? It is not Yale who is covering the tax cost for the straight, married employees. They are simply running the payroll deductions for pre-tax healthcare cost. I am gay and I run a business with 50 employees, but I would not give a benefit to gay employees that is not there for the straight employees. Fair is fair…

  • esurience


    The gay employees are having to pay a cost that the straight employees are not. That’s what’s unfair.

    Correcting something which is unfair is not imposing an unfairness. Under your reasoning, nothing that was unfair could ever be corrected.

  • Jeffree

    @John (#7): In the corporate world, employers compete for the best employees by having better benefïts packages. LGB employees may choose where 2 work based on who offers the highest total compensation (= salary plus benefits). Same goes for academia.

    Sooo, if Yale wants to compete for the best staff/ profs/ researchers, they need to match if not excede the “going rate” to atttract the best of the best.

    Since the taxcode doesn’t allow for samesex couples to add the “plus one” on to the health-insurance, some organizations will make up the difference in financial [tax] liab.ility for samesex couples so that the NET package is more or less equivalent.

    [And, yep, I’m at work & my bosss helped me with this answer.]

  • John

    I don’t think you understood me, Esurience. An affected gay employees is required to pay for the spouse’s insurance premium post-tax and not pre-tax (meaning, they pay for it with their net pay, not their gross pay). This is not a rule that Yale has, it is a required by federal tax code. Until gay marriage is recognized at the federal level, a gay couple cannot file a joint tax return and, therefore, cannot pay for the insurance policy with pre-tax dollars.

    Of course, this may become mute soon as the Obama healthcare plan is examining changes to the pre-tax basis for employer-paid insurance premiums. That would mean that everybody would pay their insurance premium with post-tax dollars.

  • John

    @Jeffree: That is a very valid point. I still have a problem, though, regarding fairness to the straight employee. Would that same employer incur the added cost of paying the tax on the spouse benefit for a heterosexual couple who is not married? I don’t really know, but I doubt it. To me, that seems unfair. Instead of fighting Yale or other employers, we need to have federal recognition of gay marriage.

  • esurience


    I understood you just fine. Yale correcting an unfairness imposed on their gay employees would not be treating their straight employees unfairly.

    Yale would be lifting a burden from their gay employees (the burden being having to pay taxes on their partner’s health insurance) — this is a burden that straight employees are not faced with, so it can’t be lifted from them.

    Put another way, Yale could have a policy that said “we’ll pay the taxes on your partner’s health insurance benefits, for our married straight and gay employees.” What that would mean in practice is they’d pay a few hundred bucks for their gay married employees, and pay ZERO for their straight employees — since straight people don’t have to pay taxes on that. So it’s perfectly fair.

    It’s called equal pay for equal work. Married gays and lesbians are not paid equally, because we have to pay taxes that married heterosexuals don’t have to pay. Correcting that is not unfair, and only a deranged mind could think it was.

  • Jeffree

    @John: I agree that the str8 couple ends up with a net difference in the net salary/ pay—but it’s all due to the current tax code.

    In terms of the “total package” of compensation & benefits, the result is supposed to be equivalent but in reality
    the University does pay out more in whole $ for the same~sex couples than for the str8 ones.

    Essentially the Uni. needs to spênd less for the hets but that’s due to the tax regs and the competition for the “best” rather than any bias toward hiring a LGB member of staff vs a couple whose marriage was recognized under Federal law for tax purposes.

  • Eric

    I know people who are directly affected by this story. While everyone else is quibbling about this and that, I know of one person who is trying to figure out how to pay for their partner’s medical needs. I know someone who might lose their house because of this little “error”. The tax is owed, that is the truth, and yes, it’s because of DOMA. But Yale needs to be progressive on this issue. What has been the most upsetting part of the entire situation is the University’s response: they quite simply do not see it as as discrimination issue. They play “Gay Ivy” well, but really, it’s a University run by rich white guys who simply don’t understand or care about anyone who isn’t rich enough to add to their endowment.

  • Alex

    That’s weird… I live in Conn and from my experiences there yale is very very gay as far as the student body goes.

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