How The Tax Code Affects Minorities
LULU GARCIA-NAVARRO, HOST:
The only two certainties in a Republican Congress are health care and taxes. After the failure to repeal the Affordable Care Act, the Republican Congress and President Trump are turning their attention to a tax overhaul.
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KEVIN BRADY: This is our year to chart a new course, to provide tax relief to millions of middle-class families and those who want to be middle-class families.
GARCIA-NAVARRO: That's Texas Republican Kevin Brady, chairman of the House Ways and Means Committee. But some early analysis suggests the GOP tax plan would mostly benefit the wealthy. Senate Minority Leader Chuck Schumer.
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CHUCK SCHUMER: Under this plan, the wealthiest Americans and wealthiest corporations make out like bandits while middle-class Americans are left holding the bag.
GARCIA-NAVARRO: So who will benefit? Professor of law Dorothy Brown from Emory University writes on how tax policy impacts minorities, and she joins us now. Thanks for being with us.
DOROTHY BROWN: Thank you for having me.
GARCIA-NAVARRO: From what you've read, how would this outline proposal affect minorities in this country?
BROWN: So when you look at who is benefiting - so, for example, they're keeping the homeownership tax subsidy, mortgage interest deduction. That's going to benefit more whites than blacks and Latinos, who don't own homes to the same extent. They're keeping retirement plans. Retirement plans from private employers tend to go to those who hold jobs at the higher incomes which, again, tend to be disproportionately white. So we know that even with the minimal sketching that we see in the Trump tax plan, rich, white Americans are going to benefit the most.
GARCIA-NAVARRO: Let's talk about the deduction known as head of household. That's what single parents use. This...
GARCIA-NAVARRO: ...Tax plan doesn't mention them, so it's not really clear what the fate may be. But first, explain what that is and why it's important for single parents in particular.
BROWN: So there's a system for singles. There's a system for married, and there's a tax system if you're head of household. So you're a single parent. The rate structure for you is better than, for example, a single tax payer. So that means a single mother or a single father is going to ultimately pay lower taxes. That isn't included in this plan. Maybe it gets added back in. Maybe it doesn't. But if it doesn't, then that's going to be detrimental to single parents.
GARCIA-NAVARRO: And single parents are overwhelmingly minorities?
BROWN: Yes. That's absolutely right - will impact disproportionate percentage of people of color. You're a single parent. You're trying to make ends meet, and Uncle Sam wants to tax you more.
GARCIA-NAVARRO: If you were asked to create a tax code that gave the middle class a break, what would it look like? What would you like to see?
BROWN: I'd like to see a tax break targeted towards two-earner household because right now, if you have two single earners who get married, they pay higher taxes. And it just so happens that black married couples are more likely to have two equal-wage earners. And white married couples are more likely to have single-wage earner, stay-at-home spouses. So as it works out, white married couples - more likely get a tax cut. Black married couples - more likely to pay higher taxes.
GARCIA-NAVARRO: We've been speaking about the impact of this tax policy on people of color. What are you hearing among leaders and minority groups about what their impression is and what they're prepared to do about it?
BROWN: You know, honestly, I haven't seen much about that. So I think it's really important that we're having this conversation because I happen to think it's the 21st-century issue. You know, you shouldn't pay more taxes because of the color of your skin.
GARCIA-NAVARRO: Professor of law Dorothy Brown from Emory University, thank you so much for joining us.
BROWN: Thank you for having me.
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