Thread by @MichaelSLinden

Professor @DarrickHamilton & I have a new issue brief today detailing 4 specific ways that the Trump tax law affects communities of color. Like the economy in general, the new law puts black and brown people at a disadvantage.

rooseveltinstitute.org/hidden-rules-n…

Short thread to follow. 1/

First & perhaps most obviously, most people know that the law is skewed to the rich. Because of longstanding racial income gaps, a tax law that benefits the very high-income over everyone else also disproportionately benefits white households over households of color. 2/

Second, racial wealth disparities are even more acute than income disparities, and this new tax law dramatically favors existing wealth over new wealth creation. 3/

For example, the massive corporate tax cuts in the law act as bonuses for those who already own a lot of wealth in the form of corporate stock. Black and Latinx households are much less likely to own stock than white households. 4/

It's also important to highlight that wealth disparities (unlike income) are directly inheritable, meaning that the advantages from wealth are intergenerational. The new tax law also included a massive tax cut for inheritances. 5/

Third, the law limits the deductibility of state and local taxes, making it harder for states and localities to raise revenue from progressive income taxes. That will push them toward other forms of revenue like criminal justice fees and fines. 6/

In fact, we know from lots of academic research that when states and localities feel revenue constrained, they increase things like speeding tickets and even asset forfeiture. 7/

Who disproportionately pays local fees and fines? Black and brown people.

Worse, encouraging states and localities to rely more on fees and fines will extend the reach of an already racialized criminal justice system. 8/

Finally, the enormous revenue loss caused by the Trump tax will increase the perceived fiscal pressure on the federal government. And whenever "austerity" is the order of the day, public employees are always the ones who have to "tighten their belts." 9/

Public employment has played a critical role in Black communities for the last 40 years. Public jobs tend to have lower racial (and gender) wage gaps. And public employees have been better protected from discrimination. 10/

Moreover, 20% of all black workers are public employees.

When the revenue loss from the Trump tax cuts for the rich (combined with the SALT limitation) lead to calls for "cutting the budget" you can be sure that black workers will bear a disproportionate share of those cuts. 11/

There are other ways that the law will disproportionately or especially burden communities of color. These are just 4 of them.

Long story short: the Trump tax law has "racial rules" embedded in it right along side its class rules.

Full brief here: rooseveltinstitute.org/hidden-rules-n…