Hidden Rules of Race are Embedded in the New Tax Law

By Darrick Hamilton, Michael Linden |

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The federal tax code is one of the most powerful tools of economic policymaking, housing critical rules that govern our economy. As such, it is also home to a set of hidden racial rules that, through intention or neglect, provide opportunities to some communities and create barriers for others.

The Tax Cuts and Jobs Act, also known as the Trump tax law, was a substantial rewrite of the tax code. Far from addressing, fixing, or improving the hidden rules of the tax code that disadvantage people of color, the new law strengthened some of these rules and even added new ones.

In an issue brief, Roosevelt Fellows Darrick Hamilton and Michael Linden explain the four major ways that the new tax law will harm people of color: by exacerbating disparities in both income and wealth; through expected increases in local fines and fees; and from an enormous revenue loss that will undermine the public sector—and millions of black workers along with it.

Before the Trump tax law, there were myriad ways that federal tax policy could have been improved to remove the hidden and not-so-hidden barriers to economic opportunity and security for people of color embedded in the tax code. Unfortunately, the new law will deliver bigger benefits and more advantages to wealthy white households relative to households of color, while simultaneously strengthening existing racial barriers to a truly inclusive economy. Only with progressive tax policy can the hidden rules of race that shape the federal tax code, the U.S. economy, and society at large begin to be undone.


Hidden Rules of Race are Embedded in the New Tax Law by Roosevelt Institute on Scribd

Darrick Hamilton is the director of the doctoral program in public and urban policy, and jointly appointed as a professor of economics and urban policy at The Milano School of Policy, Management and Environment, and the Department of Economics, The New School for Social Research at The New School in New York.  He is a fellow at the Roosevelt Institute and a national advisory committee (NAC) member of the Robert Wood Johnson Foundation (RWJF) Policies for Action, Policy and Law Research Program to Build a Culture of Health. Starting in 2019, he will be the executive director of the Kirwan Institute for the Study of Race and Ethnicity at The Ohio State University.

Michael Linden is a Roosevelt Fellow who also serves as Policy and Research Director at The Hub Project. Before The Hub, he worked as a senior policy adviser to Senator Patty Murray on the Budget and Health Education Labor & Pensions committees. He previously served as the Managing Director for economic policy at the Center for American Progress.