Paul L. Caron

Friday, August 21, 2020

Weekly SSRN Tax Article Review And Roundup: Kleiman Reviews U.S. Tax Systems Need Anti-Racist Restructuring

This week, Ariel Jurow Kleiman (San Diego) reviews Francine J. Lipman (UNLV), Nicholas A. Mirkay (Hawaii) & Palma Joy Strand’s (Creighton), U.S. Tax Systems Need Anti-Racist Restructuring, 168 Tax Notes Fed/State 855 (Aug. 3, 2020).

StevensonWhat might an “anti-racist” tax system look like? While those in the critical tax space have asked this question for some time, it seems that a larger community of tax legal scholars have more recently awakened to the importance of such considerations, sparked by the murders of George Floyd, Breonna Taylor, and others at the hands of police officers. Increasingly, tax professors are realizing that we do our students and our societies a disservice by ignoring how tax policies affect racial inequality—not to mention inequality based on gender, disability, immigration status, and the host of othernesses brandished to divide and oppress the most vulnerable among us.

Professors Francine Lipman, Nicholas Mirkay, and Palma Joy Strand’s recent article seizes this moment of awakening by calling upon those in privileged positions—which tax professors surely are—to raise questions about how our tax laws enshrine and perpetuate racial inequality. The article offers a birds-eye view of the racialized origins and racially disparate outcomes in our federal, state, and local tax systems. In doing so, it serves the important purpose of introducing critical tax and tax justice topics to those becoming newly aware of their importance.

Distinct from overt legalized racism like Jim Crow laws or redlining, the causes of disparate racial outcomes in our tax system are often more subtle. Perhaps the most direct connection can be seen at the state and local level. In many states, the regressive taxes that dominate revenue-raising apparatuses were enacted in the first half of 20th century, at a time when poll taxes often restricted the voting rights of Black citizens. More recently, research on state and local anti-tax movements like the 1970s Tax Revolt has connected anti-tax sentiment with fears over changing racial demographics, in particular the increase in Latinx populations.

The racist roots of the Tax Revolt go even deeper than the article has space to explore. The grassroots movement to support California’s Proposition 13, which drastically cut property taxes and precipitated a national wave of similar measures, shares DNA with more explicitly race-based movements, in particular opposition to racial integration of schools and antibusing campaigns. These movements drew the same community members and support for one movement tended to predict support for the other. This racialized pattern spanned the street to the ballot box, with white voters three times more likely to vote yes on Prop 13 compared to Black voters.

Given this history, it is perhaps unsurprising that research finds that Black and Latinx residents pay 10-13% higher property taxes on average, which the article notes. (In fact, such racially inequitable property tax burdens have been true for a long time, as Camille Walsh explained in her book Racial Taxation, reviewed here by Clint Wallace). Bernadette Atuahene has recently situated such disparate property tax outcomes within a broader framework of predatory government behavior that targets vulnerable households.

Although outside the scope of the article, the Tax Revolt’s gutting of state and local tax instruments has also had nontax spillover effects that have been disastrous for Black and brown communities. Specifically, tax limiting laws at the state and local level have led to greater reliance on user fees, fines, and other nontax revenue sources. Black and Latinx households are far more likely to face such fines and court fees, due to racially disparate outcomes in the criminal justice system. Those who owe such charges faces insurmountable debt, imprisonment, and disenfranchisement, resurrecting the debtors’ prisons and poll taxes of a bygone era.

At the federal level, as the authors explain, tax laws prioritize specific types of behaviors, from home buying, to education, to investing, that have been shepherded to the benefit of white households for a long time. The article surveys the tax expenditures that accrue to homeowners (residential mortgage interest and real property tax deductions), savers (§ 401(k) plans), and parents of children in school (deduction for state and local property, §§ 529 and 530). These subsidies are massive—on the order of hundreds of billions of dollars—and just so happen to target areas marked by extreme racial inequity and a history of intentional exclusion. (For research on racial inequality in the areas of housing, education, and wealth, see, respectively here, here, and here.)

The authors’ great service lies in bringing together prior research and offering a short list of policy recommendations to introduce the topic and guide those seeking to learn more. While certainly not everyone will focus scholarship and advocacy on one area—important though it may be—at least with such accessible and compelling material available no one ought to claim ignorance of the racist origins and outcomes that plague our tax systems.

Here’s the rest of this week’s SSRN Tax Roundup:

Ariel Stevenson, Scholarship, Tax, Tax Scholarship, Weekly SSRN Roundup, Weekly Tax Roundup | Permalink


"The article offers a birds-eye view of the racialized origins and racially disparate outcomes in our federal, state, and local tax systems."

Unfortunately, such racially disparate outcomes largely don't exist. According to the Tax Foundation, out of approximately $5.5 trillion in federal, state, and local tax revenues paid in 2014, white households accounted for 80%, while black and hispanic households accounted for about 10% each. No info. on Asian households.

Additionally, the much discussed racial wealth gap is almost entirely due to the disparity in wealth between white and black households in the top 10%. Working class and middle class households show no substantial wealth disparities.

Posted by: MM | Aug 21, 2020 6:25:29 PM

Lol, maybe the racism is "subtle" because you're politically mentally ill and see racism everywhere you look, including in the damned tax code. Ffs, people. What is wrong with you?

It's so funny that the people with highest IQs are brainwashed into being utter idiots, while the country folk with mediocre or low IQs are converted into relative geniuses by comparison.

Enough with this masturbatory "scholarship." It's low hanging fruit (it takes ZERO intellect), it's cringe af, and you're neglecting real scholarship (that actually takes intellect).

End tenure NOW.

Posted by: Anon | Aug 22, 2020 8:29:49 AM

So now I am supposed to tax based on race?

Posted by: John Q Public | Aug 22, 2020 4:31:44 PM

What we manifestly don’t need is a group of second-tier scholars trying to racialist the tax code and everything else

Posted by: Mike Livingston | Aug 23, 2020 5:48:14 PM

Mike: "second-tier scholars"

I've been wondering about this, because the average activist on the ground, the typical college-educated leftist, honestly believes, religiously, that all unequal outputs are the result of a nefarious racist scheme. Never mind the fact that we have enshrined in law the concept of equal protection under it, and never mind the fact that unequal inputs necessarily and scientifically would imply unequal outputs.

What's the excuse from scholars? They took Critical Thinking 101, like everybody else who teaches at university. They know better, I'm sure of that. What is the motivation to pander like this? Professional career advancement?

Posted by: MM | Aug 24, 2020 7:01:23 PM

Concur with MM again. The answer is almost always $$$. You either are - or pretend to be - woke, in order to get hired, advance, and financially survive or thrive.

Posted by: Anon | Aug 26, 2020 6:44:20 PM