icon-search icon-programRelatedInvestments icon-missionRelatedInvestments icon-lowIncomeHousingTaxCredit icon-technology icon-placeBased icon-loanGuarantee icon-minority icon-equityInvestments icon-close calendar chevron-thin-up chevron-thin-down chevron-thin-right chevron-thin-left icon-facebook icon-linkedin icon-twitter icon-youtube icon-caret icon-lock icon-star-in-circle heart-icon home-icon dashboard-icon messages-icon user-icon

Are State and Local Tax Systems Colorblind?

Tax policies are commonly viewed as race-neutral or “colorblind”— simply because information on race or ethnicity is not reported on tax returns or explicitly referenced in policymaking. But race and ethnicity can be related with income and poverty because of historical and ongoing discrimination in education, jobs, homeownership, and access to business capital. As a result of that discrimination, White households have disproportionately higher incomes than Black, Hispanic or Latino (hereafter referred to as Latinx), and Native American households and even larger concentrations of wealth. And because taxes are linked—directly and indirectly—to income, the tax system is not as colorblind as it may appear to be.

In a new Urban-Brookings Tax Policy Center brief, we examine the impact of state and local revenue systems on racial disparities. We find that racial disparities are accentuated in some states with large Black populations by their governments’ reliance on regressive taxes. In other states, racial disparities are narrowed through progressive income taxes and property taxes.

Read more from Tax Policy Center here>>>