May 14, 2021
May 14, 2021
Earlier this year, ITEP released a report providing an overview of the impacts of state and local tax policies on race equity. Against a backdrop of vast racial disparities in income and wealth resulting from historical and current injustices both in public policy and in broader society, the report highlights that how states raise revenue to invest in disparity–reducing investments like education, health, and childcare has important implications for race equity.
The report looked at how different taxes have varying impacts on racial equity and unveiled data for two states—Minnesota and Tennessee—showcasing the consequences of their contrasting tax policy choices. In short, it found that income taxes can help narrow the racial income and wealth divides while sales taxes generally make those divides worse.
This same finding is true for all states and illustrated again in a new chartbook, Racial Inequities and the Illinois Tax Code.
Disparities in income are a legacy of the long-lasting and compounding effects of historic & current racism, including employment discrimination, uneven education funding, redlining, and discrimination in lending practices.
Illinois sales and excise taxes, for example, worsen disparities in income by race and because low-income households, in which households of color are disproportionately represented must spend a larger share of what they earn to make ends meet. Black households in Illinois pay an average effective sales and excise tax rate (3.8 percent) that is 27 percent above the average rate (3.0 percent) and 31 percent above the rate faced by the average white household (2.9 percent). Hispanic households pay an average rate (3.6 percent) that is 20 percent above average and 24 percent above the rate faced by the average white household.
The state’s personal and corporate income taxes, by contrast, slightly narrow the income gap by race and ethnicity in Illinois. Because white families have higher average incomes, their average combined income tax payment, at 3.9 percent of income, is higher than the rates Black or Hispanic (3.5 percent) families pay.
Different taxes have very different impacts by race and ethnicity. Regressive revenue sources like sales and excise taxes exacerbate inequities in tax liability and income by race, and progressive revenue sources like taxes on income and wealth are critical to narrowing these disparities.
This highlights that taxes on income and wealth are invaluable in narrowing disparities across race and ethnicity. While Illinois’s income tax is more equitable than its sales and excise taxes, the state’s flat income tax rate structure makes it impossible to sufficiently offset the inequitable impacts of its more regressive tax bases, and it poses a major barrier to using the tax code to address racial income disparities in a more substantive way.
While Illinois’s income tax doesn’t exacerbate underlying income inequalities, it doesn’t go far enough to offset the regressive impacts of the regressive components of Illinois’s state and local taxes, resulting in an overall tax system that worsens income inequality. Illinois’s reliance on a flat income tax is a barrier to its income tax being a more effective tool for addressing tax and income disparities by race.
To meaningfully address disparities in income by race and ethnicity, states including Illinois need to shift toward more overall progressive tax and local tax systems with higher effective tax rates on affluent residents and comparatively less reliance on tax dollars paid by lower- and middle-income families.
In Illinois, implementing a graduated personal income tax rate structure, eliminating regressive deductions, strengthening the corporate income tax, and strengthening the estate tax on high levels of wealth would all be moves in this direction. Policies designed to lift low-income families like tax credits for workers, renters, and families with children could also enhance the racial equity of Illinois’s tax code.
Just as policymakers and stakeholders came together to make choices that have resulted in current state and local tax systems, advocates and lawmakers today can also work together to create something better. By creating more progressive and sustainable tax codes, we can advance social and economic justice for taxpayers of all races and ethnicities in all states.
View the chartbook: Racial Inequities and the Illinois Tax Code.
Mei 14, 2021 - Mapema mwaka huu, ITEP ilitoa ripoti inayotoa muhtasari wa athari za sera za kodi za serikali na za mitaa juu ya usawa wa jamii. "Kulingana na hali ya tofauti kubwa ya rangi katika mapato na utajiri kutokana na ukosefu wa haki wa kihistoria na wa sasa katika sera za umma na katika jamii pana, ripoti hiyo inasisitiza kwamba jinsi majimbo yanavyoongeza mapato ya kuwekeza katika tofauti, kupunguza uwekezaji kama elimu, afya na utunzaji wa watoto, ina athari muhimu kwa usawa wa rangi. """ Ripoti hiyo ilichunguza jinsi kodi tofauti zina athari tofauti kwa usawa wa kikabila na ilifunua data kwa majimbo mawili - Minnesota na Tennessee - kuonyesha matokeo ya chaguzi zao tofauti za sera za kodi. Kwa kifupi, iligundua kuwa kodi ya mapato inaweza kusaidia kupunguza tofauti za mapato na utajiri wa rangi wakati kodi za mauzo kwa ujumla hufanya tofauti hizo ziongeze. Ugunduzi huo huo ni kweli kwa majimbo yote na unaonyeshwa tena katika kitabu kipya cha chati, Ukosefu wa usawa wa rangi na Kanuni ya Kodi ya Illinois. """Utofauti katika mapato ni urithi wa athari za muda mrefu na za sasa za ubaguzi wa rangi, ikiwa ni pamoja na ubaguzi wa ajira, fedha za elimu zisizo sawa, redlining, na ubaguzi katika mazoea ya kukopesha." Kwa mfano, kodi ya kuuza na kodi ya bidhaa za Illinois huongeza tofauti za mapato kwa jamii na kwa sababu kaya zenye mapato ya chini, ambazo nyumba za rangi zinawakilishwa kwa kiasi kikubwa, lazima zitumie sehemu kubwa ya kile wanachopata ili kukutana. Kwa mfano, nyumba za watu weusi katika Illinois hulipa kiwango cha wastani cha ushuru wa mauzo na kodi ya matumizi (3.8%) ambayo ni asilimia 27 juu ya kiwango cha wastani (3.0%) na asilimia 31 juu ya kiwango cha kawaida cha nyumba nyeupe (2.9%). Kwa mfano, familia za Hispania zinapaswa kulipa kiwango cha wastani cha kodi ya nyumba ya wastani ya asilimia 20 na asilimia 24 juu ya kiwango cha wastani cha nyumba ya kawaida ya wazungu. Kwa kulinganisha, kodi ya mapato ya kibinafsi na ya ushirika ya serikali, hupunguza kidogo pengo la mapato kwa jamii na kikabila huko Illinois. Kwa sababu familia nyeupe zina mapato ya wastani ya juu, malipo yao ya kodi ya wastani ya mapato, kwa asilimia 3.9 ya mapato, ni ya juu kuliko viwango vya familia nyeusi au Hispanic (thelathini na tano). Kodi tofauti-tofauti zina athari tofauti sana kulingana na jamii na kabila. Vyanzo vya mapato ya kurudi nyuma kama vile mauzo na kodi ya bidhaa zinaongeza ukosefu wa usawa katika dhima ya kodi na mapato kwa jamii, na vyanzo vya mapato ya maendeleo kama vile kodi ya mapato na utajiri ni muhimu kwa kupunguza tofauti hizi. Hii inaonyesha kwamba kodi ya mapato na utajiri ni muhimu sana katika kupunguza tofauti kati ya jamii na kikabila. Ingawa kodi ya mapato ya Illinois ni sawa zaidi kuliko ushuru wake wa mauzo na kodi ya bidhaa, muundo wa kiwango cha kodi ya mapato ya jimbo hufanya iwe vigumu kulipa athari zisizo sawa za misingi yake ya kodi ya kurudi nyuma, na inaweka kizuizi kikubwa kwa kutumia kanuni ya kodi kushughulikia tofauti za mapato ya rangi kwa njia ya msingi. Ingawa kodi ya mapato ya Illinois haizidishi usawa wa mapato, haipiti kiasi cha kutosha kusawazisha athari za kurudi nyuma kwa vipengele vya kurudi nyuma vya kodi za serikali na za mitaa za Illinois, na kusababisha mfumo wa kodi ya jumla ambayo inazidisha usawa wa mapato. Illinois' kutegemea kodi ya mapato ya gorofa ni kizuizi kwa kodi yake ya mapato kuwa chombo bora zaidi cha kushughulikia ushuru na tofauti za mapato kwa jamii. Ili kukabiliana na tofauti za mapato kwa jamii na kikabila, majimbo, ikiwa ni pamoja na Illinois, yanahitaji kuhamia kwa mifumo ya kodi ya jumla ya maendeleo na ya kodi ya mitaa na viwango vya juu vya ushuru kwa wakazi matajiri na kutegemea kidogo kwa dola za kodi zilizolipwa na familia za mapato ya chini na ya kati. Katika Illinois, kutekeleza muundo wa kiwango cha kodi ya mapato ya kibinafsi, kuondoa punguzo la kurudi nyuma, kuimarisha kodi ya mapato ya kampuni, na kuimarisha kodi ya mali katika viwango vya juu vya utajiri, yote yatakuwa hatua katika mwelekeo huu. Sera zilizobuniwa ili kuinua familia zenye mapato ya chini kama mikopo ya kodi kwa wafanyakazi, wapangaji, na familia zilizo na watoto pia zinaweza kuongeza usawa wa kikabila wa kanuni ya kodi ya Illinois. Kama vile watunga sera na wadau walivyoungana kufanya chaguzi ambazo zimesababisha mifumo ya sasa ya kodi ya serikali na ya mitaa, watetezi na wabunge leo wanaweza pia kufanya kazi pamoja kuunda kitu bora. """Kwa kuunda kanuni za kodi za maendeleo na endelevu zaidi, tunaweza kuendeleza haki ya kijamii na kiuchumi kwa walipa kodi wa jamii na makabila yote katika majimbo yote." Tazama kitabu cha chati: Ukosefu wa Usawa wa Rangi na Kanuni ya Kodi ya Illinois.