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New Report Exposes Tax System’s Role in Widening Racial Wealth Gap, Calls for Urgent Reforms

NNPA NEWSWIRE — The message from Color of Change and Americans for Tax Fairness is clear: America’s tax system is broken, and without immediate reforms, the racial wealth gap will continue to widen. “Addressing the insidious racial preferences in our tax code is one of the most direct ways we can not only help Black communities grow here and now but for generations to come,” concludes Color of Change Managing Director Portia Allen-Kyle.

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iStockphoto / NNPA
iStockphoto / NNPA

By Stacy M. Brown, NNPA Newswire Senior National Correspondent
@StacyBrownMedia

Color of Change, the nation’s largest online racial justice organization, and Americans for Tax Fairness released a damning report Thursday exposing the deep racial inequities entrenched in the U.S. tax system.

The issue brief “How Tax Fairness Can Promote Racial Equity,” written by Color of Change Managing Director Portia Allen-Kyle and Americans for Tax Fairness Executive Director David Kass, exposes the systemic flaws in tax policy that have widened the racial wealth gap and prevented economic mobility for Black, brown, and Indigenous communities.

The report urgently calls for sweeping reforms to stop the flow of tax benefits to the wealthiest Americans — who are overwhelmingly white — while offering concrete solutions to make the tax code work for everyone, not just the top 1%.

“An equitable tax system does two things,” Allen-Kyle asserted. “It narrows the racial wealth gap from the bottom up and spurs economic mobility for Black, brown, and Indigenous individuals and families. Our current tax code fails on both accounts. It’s a prime example of how so-called ‘colorblind’ systems actively prevent Black families from building generational wealth and economic security.”

Tax Code Deepens Racial Disparities, Experts Say

The brief pulls no punches in describing how current tax policies disproportionately benefit wealthy white families, further deepening racial inequalities. By giving preferential treatment to wealth over work, the system locks in economic advantages for white households while leaving communities of color to bear the brunt of these inequities.

“Our tax system is not only failing to address racial wealth inequality, it’s exacerbating it,” Kass warns in the report. “We privilege wealth over work, fail to adequately tax our richest households and corporations, and allow inherited fortunes to compound unchecked by taxation. This perpetuates a legacy of racial inequality.”

The racial wealth gap has exploded in recent years, with the median wealth gap between Black and white households jumping from $172,000 in 2019 to over $214,000 in 2022. Economic crises such as the Great Recession and the COVID-19 pandemic further entrenched these divides, benefiting the already wealthy, while leaving Black, brown and Indigenous communities further behind.

The Racial Wealth Gap and Homeownership

Homeownership, long touted as a primary means of building wealth in America, has failed to deliver for Black families. The report points to factors such as biased home appraisals and a regressive property tax system as key reasons why Black homeowners have been unable to accumulate wealth at the same rate as their white counterparts.

As the brief notes, with critical provisions of the Tax Cuts and Jobs Act (TCJA) set to expire, now is a pivotal moment for tax reform. “We have a once-in-a-generation opportunity to reform our tax system to address racial inequality,” the report states, comparing recent monumental legislation like the Bipartisan Infrastructure Law and the Inflation Reduction Act.

Three Key Reforms to Tackle Racial Inequity

The report lays out three central reforms aimed at curbing the wealth concentration among the ultra-rich and dismantling the racial inequities baked into the tax code:

  1. Taxing Wealth Fairly: The report calls for equalizing the tax rates on wealth and work. Currently, capital gains — profits from investments — are taxed at a far lower rate than wages earned by working people, a disparity that overwhelmingly benefits white households. The vast majority of capital gains income flows to white families, who comprise only two-thirds of taxpayers but receive 92% of the benefits from lower tax rates on investment income.
  2. Strengthening the Estate Tax: The estate tax, which is supposed to curb the accumulation of dynastic wealth, has been weakened over time, allowing large fortunes — primarily held by white families — to grow even larger across generations. The report calls for stronger enforcement of the estate tax to prevent the further entrenchment of wealth and power within a small, overwhelmingly white elite.
  3. Targeting Tax Deductions to Benefit Lower-Income Households: Deductions for mortgage interest, college savings, and retirement accounts disproportionately benefit wealthier, predominantly white households. In order to prevent lower-income and minority households from falling behind due to policies that are currently biased in favor of the wealthy, the brief advocates for restructuring these deductions.

Biden-Harris Administration and Senate Proposals for Change

Both the Biden-Harris administration and Senate Finance Committee Chairman Ron Wyden have proposed addressing the racial wealth gap.

The Billionaire Minimum Income Tax (BMIT) and the Billionaire Income Tax (BIT) would ensure that the wealthiest Americans — who often go years without paying taxes — contribute their fair share. These proposals would raise over $500 billion in revenue over the next decade, which could be reinvested in healthcare, education, and housing for communities of color.

As the report points out, our current tax system is skewed in favor of the ultrawealthy. It allows the rich to avoid paying taxes on the increased value of their investments unless they sell them. They often borrow against these growing fortunes, further delaying taxation, which allows white billionaires to accumulate vast wealth while paying a fraction of what working families pay in taxes.

Defending IRS Funding to Hold the Wealthy Accountable

The report also highlights the critical need to defend IRS funding, restored under the Inflation Reduction Act, which is essential for cracking down on wealthy tax cheats.

Contrary to Republican claims, this funding will not increase tax enforcement on households earning less than $400,000. Instead, it will improve customer service and expand the Direct File program, saving taxpayers significant time and money.

The Biden administration’s restored IRS funding is expected to raise an additional $100 billion over the next decade by ensuring the wealthiest Americans and corporations pay what they legally owe.

A Call for Urgent Action

The message from Color of Change and Americans for Tax Fairness is clear: America’s tax system is broken, and without immediate reforms, the racial wealth gap will continue to widen.

“Addressing the insidious racial preferences in our tax code is one of the most direct ways we can not only help Black communities grow here and now but for generations to come,” Allen-Kyle concludes.

Activism

Oakland Post: Week of February 19 – 25, 2025

The printed Weekly Edition of the Oakland Post: Week of February 19 – 25, 2025

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Activism

U.S. House Minority Leader Hakeem Jeffries and Rep. Lateefah Simon to Speak at Elihu Harris Lecture Series

The popular lecture series is co-produced by the Oakland-based Martin Luther King Jr. Freedom Center and Peralta Community College District. Jeffries’ appearance marks the 32nd lecture of the Barbara Lee and Elihu Harris Lecture Series, which has provided thousands of individuals with accessible, free, high-quality information.

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U.S. House Minority Leader Hakeem Jeffries (left) and Rep. Lateefah Simon (D-CA-12) (Right).
U.S. House Minority Leader Hakeem Jeffries (left) and Rep. Lateefah Simon (D-CA-12) (Right).

By Scott Horton

United States House of Representatives Minority Leader Hakeem Jeffries (D-NY-8) will be a speaker at the Barbara Lee and Elihu Harris Lecture Series on Friday, Feb. 21.

The event will be held at the Henry J. Kaiser Center for the Arts, 10 Tenth Street in Oakland, at 7 p.m.

The popular lecture series is co-produced by the Oakland-based Martin Luther King Jr. Freedom Center and Peralta Community College District. Jeffries’ appearance marks the 32nd lecture of the Barbara Lee and Elihu Harris Lecture Series, which has provided thousands of individuals with accessible, free, high-quality information.

The overarching goal of the lecture series is to provide speakers from diverse backgrounds a platform to offer their answers to Dr. King’s urgent question, which is also the title of Jeffries’ latest book: “Where do we go from here: Chaos or Community?”

In addition to Jeffries, Congresswoman Lateefah Simon (D-CA-12) will also speak.

“Certainly, now is a time for humanity, in general, and Americans in particular to honestly and genuinely answer Dr. King’s question,” said Dr. Roy D. Wilson, Executive Director of the Martin Luther King Jr. Freedom Center and Executive Producer of the lecture series.

“Dr. King teaches that time is neutral but not static. Like the water in a river, it arrives and then quickly moves on,” continued Wilson. “We must urgently create conditions for listening to many different answers to this vital question, and generate the development of unity of action among all those who struggle for a stronger democracy.”

In his book, Jeffries shares his experience of being unanimously elected by his colleagues as the first African American in history to ever hold the position of House Minority Leader.

In January 2023 in Washington, Jeffries made his first official speech as House Minority Leader. He affirmed Democratic values one letter of the alphabet at a time. His words and how he framed them as the alphabet caught the attention of Americans, and the speech was later turned into a book, The ABCs of Democracy, bringing Congressman Jeffries rousing speech to vivid, colorful life, including illustrations by Shaniya Carrington. The speech and book are inspiring and urgent as a timeless reminder of what it means to be a country with equal opportunities for all. Jeffries paints a road map for a brighter American future and warns of the perils of taking a different path.

Before his colleagues unanimously elected him Minority Leader in 2022, Jeffries previously served as Chair of the House Democratic Caucus and as an Impeachment Manager during the first Senate trial of the 45th President of the United States.

Jeffries was born in Brooklyn Hospital, raised in Crown Heights, grew up in the Cornerstone Baptist Church and he is a product of New York City’s public school system, graduating from Midwood High School. Jefferies went on to Binghamton University (BA), Georgetown University (master’s in public policy) and New York University (JD).

He served in the New York State Assembly from 2007 to 2012.

Admission is free for the Feb. 21 Barbara Lee and Elihu Harris Lecture Series featuring Congressman Jeffries. Please reserve seats by calling the Martin Luther King Jr. Freedom Center at (510) 434-3988.

Signed copies of his book will be available for purchase at the event.

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Alameda County

After Years of Working Remotely, Oakland Requires All City Employees to Return to Office by April 7

City Administrator Jestin Johnson recently told city unions that he is ending Oakland’s telecommuting program. The new policy will require employees to come to work at least four days a week. These new regulations go into effect on Feb. 18 for non-union department heads, assistant and deputy directors, managers, and supervisors. All other employees must be back at work by April 7.

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Oakland City Hall. File photo.
Oakland City Hall. File photo.

By Post Staff

The City Oakland is requiring all employees to return to the office, thereby ending the telecommuting policy established during the pandemic that has left some City Hall departments understaffed.

City Administrator Jestin Johnson recently told city unions that he is ending Oakland’s telecommuting program. The new policy will require employees to come to work at least four days a week.

These new regulations go into effect on Feb. 18 for non-union department heads, assistant and deputy directors, managers, and supervisors. All other employees must be back at work by April 7.

The administration may still grant the right to work remotely on a case-by-case basis.

In his memo to city unions, Johnson said former President Joe Biden had declared an end to the pandemic in September 2022, and that since then, “We have collectively moved into newer, safer health conditions.”

Johnson said “multiple departments” already have all their staff back in the office or workplace.

The City’s COVID-era policy, enacted in September 2021, was designed to reduce the spread of the debilitating and potentially fatal virus.

Many cities and companies across the country are now ending their pandemic-related remote work policies. Locally, mayoral candidate Loren Taylor in a press conference made the policy a central issue in his campaign for mayor.

City Hall reopened for in-person meetings two years ago, and the city’s decision to end remote work occurred before Taylor’s press conference.

At an endorsement meeting last Saturday of the John George Democratic Club, mayoral candidate Barbara Lee said she agreed that city workers should return to the job.

At the same time, she said, the city should allow employees time to readjust their lives, which were disrupted by the pandemic, and should recognize individual needs, taking care to maintain staff morale.

The John George club endorsed Lee for Mayor and Charlene Wang for City Council representative for District 2. The club also voted to take no position on the sales tax measure that will be on the April 15 ballot.

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