Why Smart Entrepreneurs Care About Gay Marriage
Before long, given the cases before the U.S. Supreme Court, we'll likely have legal gay marriage across the entire United States. Besides gay people who want to tie the knot, who will win as a result?
First, a 60-second legal lesson. There are two cases before the U.S. Supreme Court. The first is a challenge to Proposition 8 in California; the second challenges the federal Defense of Marriage Act (DOMA), which defines marriage as being only between one man and one woman.
As we saw in the Obamacare decision last year, it can be dangerous to try to predict the court's moves. But suffice it to say (lawyers love to say that), it's a pretty safe bet that the court will at least say that states can recognize gay marriage, and might well say that they have to. (A lot of it is likely to come down to Justice Anthony Kennedy.)
A sudden shift in the cultural context like this--and make no mistake, this will be huge--always brings with it new opportunities. Here are five of them. The Supreme Court will likely rule in June, so it's time to start planning.
(By the way, I'm sure there are a lot of others I haven't thought of. Let me know if you think I've missed some big ideas.)
1. The Wedding Industry.
Is it okay for me to say that gay people throw amazing parties? Even so, I was surprised to find such a gigantic estimate of the overall effect of gay marriage on the wedding industry: $9.5 billion!
As it happens, I'm in the market for a lot of wedding-related services myself these days, and I can tell you firsthand that the moneymaking opportunities here are endless. From engagement rings to wedding cakes, from invitations to bands and DJs (and don't forget the gifts!), there are few days for which people will open their wallets like a wedding day.
U.S. laws on adoption by gay couples are not consistent, but if the Supreme Court acts on gay marriage, it's likely to have a significant legal impact on laws banning gay men and women from adopting children as well. Even without further legal changes, more married couples likely means more couples who want children.
Given that historically some organizations providing adoption services have exited the business once they were no longer allowed to exclude gay parents, the opportunities for new players in the field might be even greater. For that matter, it likely would mean more opportunities for surrogacy and artificial insemination.
Good news for lawyers! Sadly, where there are marriages, there are likely to be divorces. Even the couple who sued Massachusetts successfully for the right to be married eventually split up.
Currently, divorce can be a complicated mess for gay couples, depending on where they live, and that can be a boon for lawyers who specialize in these kinds of complex cases. But soon, there are likely to be a lot more comparatively less-complicated divorces. As one of my old law school professors once said, "When somebody else's marriage ends, an [entrepreneurial] opportunity begins."
4. Government spending.
More marriage means more tax revenue, and when there is more tax revenue, there is almost certain to be more government spending. Let's focus on just one kind of tax increase to make the point: the federal income tax marriage penalty, in which a married couple pays more income tax together than they would on the same income divided equally if they were not married.
Numbers vary here, but the best estimates I can find put the average marriage penalty around $2,000. Let's suppose that half of same-sex couples who are living together get married, since that's what happened in Massachusetts when same-sex marriage was legalized there. That would mean 300,000 more married couples, and thus at least a $6 billion marriage penalty tax boom.
5. Socially conservative direct marketing.
Polls suggest that support for gay marriage has become overwhelming, but the opposing minority in the United States can be very vocal. There's money to be made there. Subscribe to one conservative email list, and you might soon find that you're subscribed to quite a few, urging the like-minded to contribute just a few more dollars each week to defend against the liberal horde.
Take this guy, for example, a former Navy chaplain who made headlines a few years ago for his protests against a military religious policy. These days, he sends "blast faxes" opposing gay marriage to political leaders for his readers, at between $19 and $159 a batch. Now that's an entrepreneur!
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