Paul L. Caron

Wednesday, February 22, 2023

American Tax Policy Institute Hosts Symposium This Friday On The Federal Income Tax: Racially Blind but Not Racially Neutral


The American Tax Policy Institute hosts a symposium on The Federal Income Tax: Racially Blind but Not Racially Neutral at Skadden, Washington, D.C., on Friday, February 24 (free registration):

Introduction and Opening Remarks

  • Alice Abreu (Temple)

Panel I: Race, History, Taxation and Behavior

Race and taxation have always been intertwined in the United States. Tax law is deeply implicated in slavery, as colonies and then states sought to impose taxes on both land and the human beings who were treated as property. The United States Constitution famously counted enslaved persons as three-fifths of the white persons in the jurisdiction, and did not count “Indians” at all, for purposes of determining political representation. How, over time, did how subordinated racial groups, particularly African Americans, Native Americans, and others, rely on tax rhetoric and reality, including their roles as taxpayers, to demand greater political and social rights? In what way has the tax system continued to prop up the systematic exclusion of Blacks and other groups from ownership of homes and other property? What are the racial and gendered dimensions of choices taxpayers have made over time, including choices about the provision of services to family members? Who benefits from the tax-free treatment of imputed income? Given the tax system’s role in racial subordination, is there a way that the tax laws might be deployed to remedy race-based harms of enslavement, forced dispossession, centuries of race-based discrimination, or raced and gendered patterns of behavior?

Panel II: Tax Systems and Privileged Choices

A tax system’s choices about what to tax and what to exempt from taxation both reflects and creates certain values, both in terms of domestic and international policy. For example, amounts earned from employment are treated as income, but the value of self-rendered services or services provided to members of one’s immediate family are not. Organizations that discriminate against African-Americans are not entitled to 501(c)(3) tax-exempt status, but the Fourteenth Amendment does, to a certain degree, permit race-conscious affirmative policies in higher education and elsewhere. The tax code permits deductions for transfers to charities, but only for taxpayers who itemize, thus making it more “expensive” for non-itemizers to give. Certain foreign countries are targeted for sanctions more readily than others. In the absence of official IRS collection of tax data by race in domestic and international contexts, what are the race, gender, and other identity characteristics of those who make itemizable vs. non-itemizable charitable gifts, as well as the organizations they support? How does the racial bias reflected in the tax law manifest itself in the international context? How might tax exempt organizations be impacted by the cases coming before the Supreme Court involving race-consciousness in higher education?

11:45 AM: Lunch and Welcome Remarks

  • Jessica Hough (Partner, Skadden)

Panel III: Systemic Inequalities Undergirding Facially Neutral Tax Laws

The Internal Revenue Code does not provide that taxpayers are subject to different rules because of the color of their skin, and yet the tax laws have undeniable racialized impacts. Certain educational tax benefits, for example, disproportionately benefit white families. Laws intended to encourage economic investment in financially distressed communities have led to luxury housing and student housing in some places. What type of evidence will be sufficient to persuade the general public of the racialized impacts of seemingly neutral tax laws? How is it possible to use the tax system, as well as tax rhetoric, to move toward a society that is more racially equitable? How can tax policy, together with other law reform, be harnessed to address remedy race-based income and wealth inequalities?

Panel IV:  Discrimination Through Non-Discrimination

By declining to collect data based on race, the Internal Revenue Service props up the myth that the tax laws are neutral in application. After all, in the absence of official data about the race, critics easily dismiss the work of scholars who develop that information through the triangulation of other sources. What is at stake in the IRS’s failure to gather race-based data? How might we understand small businesses, taxpayers of all income levels, or even the IRS itself differently, in light of uncontested race-based data? Are the insights that can be gained from race-based tax data outweighed by potential “losses” to public confidence in the government generally or the tax system in particular? Who benefits and who is disadvantaged in the absence of a robust analysis of the intersection of race and taxation? What are the roadblocks to changes in the status quo?

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