Although U.S. federal tax laws don’t have explicit differences in tax rules by race (disparate treatment), the outcomes of those facially “race-neutral” rules have differential effects across racial groups (disparate impact).
The article published in Tax Notes (3/8/21), and supported by the Swiss economic think tank, Council on Economic Policies, shows significant disparate racial impacts of federal government subsidy and incentive programs run through the tax system (tax expenditures).
A heightened focus on racial injustice should be part of a broader renewed focus on equity considerations in the U.S. tax laws, addressing long-standing and growing racial, income and wealth inequalities.
The article recommends eight steps that should be considered in the reform of tax expenditures for reducing racial and income disparities.
Tom Neubig