Wednesday, December 6, 2023
Jeremy Bearer-Friend (George Washington; Google Scholar), Paying for Reparations: How to Capitalize a Multi-Trillion Reparations Fund, 67 How. L.J. __ (2024):
This Article proposes a novel approach to capitalizing a reparations fund worth trillions of dollars. Under the proposal, publicly-traded firms on U.S. exchanges would be required to remit shares of corporate equity to a reparations trust fund in lieu of cash tax payments. Under the terms of this proposal, our federal government could successfully capitalize a multi-trillion reparations fund in less than a year.
The primary contribution of this Article is to offer a unique financing structure for reparations—a national effort expected by all estimates to require trillions of dollars. The Article describes the features of the in-kind tax proposal, the myriad design choices that would be necessary to ensure effective implementation, and its analogs in the private sector for capitalizing a fund. The Article also evaluates the limitations of an in-kind tax proposal, ultimately concluding that in-kind remittance remains preferable to other tax policy options.
The multi-trillion target size of the fund is based on the reparations amounts proposed by Neal (1990) and further elaborated by Darity & Mullen (2020). The beneficiaries of the fund are Black Americans with a formerly enslaved ancestor based on the eligibility criteria proposed by Darity & Mullen (2020). While the proportion of total outstanding shares to be remitted to the fund is a flexible aspect of the proposal – the tax rate is adjustable based on the preferred size of the fund – the Article does not propose issuing a controlling interest to the fund. A separate mechanism would also be applied to privately-held firms to address potential market distortions associated with the new tax.