A New Study Shows White Families Getting Four-Fifths of Trump's Tax Cut

["Dave Farber" <farber () gmail com>]

Begin forwarded message:

> From: Dewayne Hendricks <dewayne () warpspeed com>
> Date: October 15, 2018 19:11:46 JST
> To: Multiple recipients of Dewayne-Net <dewayne-net () warpspeed com>
> Subject: [Dewayne-Net] A New Study Shows White Families Getting Four-Fifths of Trump's Tax Cut
> Reply-To: dewayne-net () warpspeed com
>
> [Note:  This item comes from friend Robert Berger.  DLH]
>
> A New Study Shows White Families Getting Four-Fifths of Trump’s Tax Cut
> Experts warn that last year’s tax law will “supercharge” racial disparities.
> By HANNAH LEVINTOVA
> Oct 13 2018
> <https://www.motherjones.com/politics/2018/10/trump-tax-cuts-race-racial-impact-disparity/>
>
> Under President Donald Trump’s tax cuts, white Americans are the big winners, and the existing wealth gap between 
> them and minority households will continue to grow. That’s the conclusion of a new report released this week on the 
> racial implications of the Tax Cuts and Jobs Act, the bill championed by Trump and passed by congressional 
> Republicans in December 2017.
>
> The report, from the Institute on Taxation and Economic Policy (ITEP) and the nonprofit Prosperity Now, is the first 
> quantitative analysis of its kind. While a number of previous reports have noted that the vast majority of the $1.5 
> trillion doled out to taxpayers and businesses by the cuts will go to the wealthiest Americans, this newest study 
> highlights how that dynamic affects minority families. After estimating taxes under the law for white, black, Latino, 
> and Asian households across various income brackets, the authors conclude the law will “supercharge” existing racial 
> disparities in wealth “to an alarming extent.”
>
> “Households of color have less income and have less wealth than white households, in large part due to centuries of 
> systemic racism,” says Meg Wiehe, ITEP’s deputy director and one of the report’s authors. “So inevitably a tax cut 
> that’s so expensive and so tilted to the top is furthering not just income inequality—it’s also furthering racial 
> inequity in income and in wealth.”
>
> The authors found that nearly 80 percent of the $275 billion in tax cuts to individual households will go to white 
> families—even though whites make up just two-thirds of taxpayers. In dollar terms, white families will get about $218 
> billion in tax cuts, while black households will see about $14 billion and Latinos about $18 billion.
>
> Black and Latino families make up about 22 percent of the US population, but account for nearly 30 percent of 
> America’s poorest families, the authors note. As the benefits of the overall tax cuts skew toward the wealthiest 
> Americans, the cuts end up disproportionately privileging white families.
>
> The average annual tax cut received by white households, $2,020, is more than double the average cuts black and 
> Latino families will receive. Asian families, who have the highest average income of any group, will receive the 
> highest average tax cut, at $2,560. But low-income Asian families will see the least benefit from the 2017 tax cuts, 
> even lower than their black and Latino counterparts: just $70 per household.
>
> The report also shows how even among the very wealthiest households in America—the top 1 percent—white families still 
> do better. Immigrants and people from less affluent backgrounds who become rich are more likely to have fortunes 
> rooted in income from work, but the law further entrenches tax advantages favoring income from investments, and also 
> expands tax exemptions on estates, inheritances, and gifts. “The bill was designed to benefit wealth over work,” 
> Wiehe says.
>
> Just last month, the House voted to approve a package of additional reforms, including an extension of individual tax 
> cuts enshrined in the original 2017 law. While unlikely to pass the Senate, the report’s authors point out that the 
> move shows that Congress, if it so wanted, could rework the cuts to target benefits to lower- and moderate-income 
> families—shrinking the racial wealth divide. The authors suggest expanding estate taxes or reforming breaks tied to 
> homeownership so they better serve lower-income families.
>
> “As Congress continues to discuss enacting more tax cuts,” the authors write, “we should be creating a tax system 
> that is fair and equitable, that provides the most wealth-building support to those who need it most, that reflects 
> true American values and that helps close the racial wealth divide.”
>
> [snip]
>
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