Excerpted From: Francine J. Lipman, How to Design an Antiracist State and Local Tax System, 52 Seton Hall Law Review 1531 (2022) (261 Footnotes) (Full Document)

FrancineJLipmanSince the first ship of enslaved African people landed in Virginia in 1619, racist policies in institutions, systems, structures, practices, and laws have ensured inequity for people of color. These racist policies include every imaginable variant of injustice from slavery to lynching, to segregation, and to economic injustices, including those delivered through tax systems today. Although facially color-blind, tax systems have long empowered the explosion of white wealth and undermined wealth accumulation for Black families and communities of color. State and local tax systems, especially in the South, have deeply-rooted racist fiscal policies, including Jim Crow laws that continue to sustain and bolster racial inequality today. These injustices have become even more obvious during the global pandemic.

As Americans struggle with COVID-19 and its aftermath, racial inequality has become even more salient. People of color have suffered higher rates of unemployment, impoverishment, infection, and death from COVID-19. Moreover, scientists, economists, engineers, and doctors agree that racism, not race, is the cause of this disproportionate impact. As we struggle to battle COVID-19 and rebuild from its devastation, federal, state, and local governments have used many tools, including tax systems. In 2021, the federal government, together with twenty-nine states and the District of Columbia, enacted significant tax cuts, with nearly all states cutting individual income tax rates and many tax systems meaningfully delivering expanded tax credits for workers and their children.

With race increasingly front and center as a cause of economic inequality, this Article applies Dr. Ibram X. Kendi's transformative concept of antiracism as the framework to rethink state and local tax systems to better serve all Americans.  Deriving an antiracist framework from decades of exhaustive research, Dr. Kendi, a professor of history, international relations, and an award-winning author, has facilitated a broader understanding of racism, its poisonous consequences, and most importantly provides antiracist tools to dismantle it.

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Racist policies have deep roots in America generally, and in tax systems specifically.  Our founding fathers were raised on racist ideas, including slavery, that served their self-interests--protecting and enhancing their power and wealth accumulation. Their racist ideas gave rise to racist policies that have been hard-wired in American systems, institutions, laws, and minds for centuries. While racist policies have deep roots, racism is not invariable, but rather is a dynamic state that can be dismantled. Dr. Kendi explains “racism and antiracism are not fixed identities .... What we say about race, what we do about race, in each moment determines what--not who--we are.”  Racism is a policy problem that antiracism policies enacted through broad legislation throughout our institutions and systems, including tax and spending, can change. 

Scholars focusing on racial inequities understand they derive from a myriad of historical and current policy choices with their own sets of motivations and disparate impacts based on factors that are also the result of historic and current policy choices.  Racism is broad and deep and enduring, resulting today in outrageous racial inequities. The income gap between white households and Black households in America is a glaring example of racial inequity from racist policies. Median household income ranges “from $45,792 in Mississippi to $86,738 in Maryland.”  States with the highest share of Black residents generally have the lowest median household incomes.  Even in these low median income states the income gap between white households and Black households is stark.  In every state and the District of Columbia, the median income for white households exceeds the median income for Black households by up to 300 percent.  The racial wealth gap between white households and Black households is several times greater than the income gap. Black households would have to increase their wealth 500 percent, and Latinx households would have to increase their wealth 400 percent to achieve wealth equity with white households.  These racial inequities are due to racial discrimination from racist policies grounded in racist ideas. Given the magnitude of these Black-white economic gaps, it will take a range of antiracist policies, including in state and local tax systems, over an extended period of time to remedy. 

State and local tax systems across America not only raise one-third of all tax revenue but disperse about one-half of all domestic spending.  These are powerful fiscal tools that if properly reformed using antiracist policies, including many of those suggested above, could begin to dismantle economic injustice. Past racist policies sustain and amplify racial inequities; future antiracist policies can be shaped to address and counterbalance those inequities. There is no shortage of antiracist tax tools that can be implemented by government policymakers if only they have the will to design and enact antiracist state and local tax systems. 

William S. Boyd Professor of Law. William S. Boyd School of Law, University of Nevada, Las Vegas.