What 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.