Opinion: Racism in the tax code | Diversity
Tax season has arrived. For working-class Americans who qualify for refunds and benefits like the Child Tax Credit, it’s likely a season to catch up on some bills, like rent and utilities. Maybe for a month or so some families will be able to stock up on extra groceries or household items.
For Black and Latino taxpayers, another fiscal year has passed and the racial wealth gap and structural racism in tax policy has not gone away.
This month, Colorado’s Fund Our Future coalition — which includes Colorado Black Women for Political Action, the Colorado State Parents Coalition, the NAACP, and the Colorado Tax Institute — held a webinar entitled “How to solve racism in our tax code”. Keynote speaker Dr. Dorothy Brown is the author of The Whiteness of Wealth: How the Tax System Is Impoverishing Black Americans — and How We Can Fix It.
Pointing to the child tax credit as an example of the racism built into the tax code, Brown points out that during a congressional debate in 1997, when the credit was originally passed, the then Speaker of the House , Newt Gingrich, said that giving “an extra tax credit to low-income taxpayers who don’t pay taxes is welfare pure and simple. Brown says: “Politicians on all sides understand that by portraying a government program as welfare, they race against recipients as black while creating opposition to the program among white Americans – welfare has become a whistle to race.” In the Under the U.S. bailout, Brown says, the child tax credit was expanded to include 65 million U.S. children, or about 90 percent of the nation’s children. paid less. e from the Center on Budget and Policy Priorities found that further credit expansion could lift 4.1 million of these children out of poverty and reduce the overall poverty rate by about 40%.
It’s hard to argue with such dramatic benefits; However, portraying the child tax credit as something that benefits black children meant it was narrowly passed in the first place. Another example: tax subsidies for marriage benefit white Americans more than black Americans, because the former group is more likely to marry.
On his first day in office, President Joe Biden announced an executive order on promoting racial equity and supporting underserved communities through the federal government. This mandate states that “the disparities rooted in our laws and public policies, and in our public and private institutions, have often denied this equal opportunity to individuals and communities”. The aim is to “address converging economic, health and climate crises that have exposed and exacerbated inequalities, while a historic movement for justice has exposed the unbearable human costs of systemic racism”.
Of course, these inequalities have all been exacerbated exponentially by COVID.
Biden’s executive order gave the head of each federal agency 200 days from January 20, 2021 to conduct a review and provide a report to the President’s Assistant for Domestic Policy. This report should[reflect] findings that uncovered barriers preventing underserved communities from accessing, enjoying, or advancing equity in federal programs and opportunities. The second year, and crickets. The IRS has yet to release data on how current tax policies affect inequalities based on race and ethnicity.
Recent events, like the public murder of George Floyd, have made racial justice a popular cause, but now solving systemic racism no longer seems to be a priority for policy makers. The full fallout on our economy from COVID has yet to be realized, but, as with everything else, the people of BIPOC will be hit the hardest, including those who have shown up on the frontlines even during a pandemic.
Tax policy must be a priority in any plan to build back better. It’s time to hold Congress accountable for Biden’s executive order.