How Biden policy is addressing the inherent racism behind the U.S. tax code
EXCLUSIVE: The Biden administration is seeking to close wealth and equity gaps through a host of initiatives across the federal government, including an automatic monthly refundable child tax credit
Tax Day is a day of dread for some and happiness for others. The day hosts the frantic dance with tax forms calculated in the midst of nail-biting of what is owed to the government or what could be considered by some free money to citizens.
Some critics of the tax code have raised the issue that it is inherently unfair when race is taken into consideration.
Dorothy Brown, author of “The Whiteness of Wealth: How the Tax System Impoverishes Black Americans — And How We Can Fix It,” contends that “in general, our tax policies ignore the day-to-day reality of most Black Americans, who are still playing catch-up in a system that deliberately excluded them for many years.”
Her research found that the current tax code takes money out of the pockets of Black parents putting money into white pockets, making it harder for Black children to remain in the middle class.
The Biden administration is addressing this issue of closing wealth and equity gaps through a host of initiatives across the federal government. Specifically, the IRS and the Treasury Department are giving families of almost 90% of the nation’s children an automatic monthly refundable child tax credit. Parents who have given the IRS their direct deposit information could receive up to $300 a month with the child tax credit. The payments will begin on July 15 and run for an entire year.
“This is the first time the IRS has provided a benefit on a monthly basis, and that, again, is so important for families who are trying to make ends meet month by month for far too many of them,” said Heather Boushey of the Council of Economic Advisors.
“It’s really tough to have to wait until you file your taxes and get a tax refund for this really important benefit. And so, we’re hoping that this really helps families with the tangibles.”
Ray McGuire, a Democratic candidate in New York City’s mayoral race and former executive at Citigroup, supports the Biden administration’s effort. But also points to property tax as a main source of disparity within the tax code.
“We need to address that today,” McGuire told theGrio. “It has been delayed for quite some time in our communities are feeling it.”
McGuire wants to shift the code so that it’s “based on property values” that also take into account the needs of renters and homeowners who are disproportionately paying into the current system.
Another key point of McGuire’s economic proposal for the city hit hard by the pandemic seeks to offer a pairing to the president’s tax plan.
In essence, McGuire contends his economic plan will create a pathway for small businesses to build earned income tax credits.
In addition to the proposed financial benefits for parents, if McGuire wins his bid for NYC mayor he intends to make financial literacy a part of the city’s education curriculum for children, starting with 6th graders.
“I got you from cradle to career, that’s on me,” McGuire pledged. “I’m holding down the community for that, I’m leading forward for that.”
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