Building An Inclusive Tax System In A Time Of Crisis

Just Economy Conference – May 12, 2021


Every year, low-income working families count on the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) in their refund to provide a vital cash infusion to their households. They use these to pay down debt, build up savings and make deferred purchases. It’s hard to overstate the importance of these refunds. For many, it’s the biggest lump sum they receive all year. However, widespread unemployment due to COVID-19 threatened EITC and CTC eligibility in 2020. Millions of Americans stand to lose their refunds, deepening systemic wealth inequalities that have disproportionately impacted people of color.

The issue highlights the limitations of our approach to low-wage work in the U.S.– one that has evolved over decades to rely on tax credits with earned income eligibility to supplement wages. What we need are new, innovative ways for low- and moderate-income workers to begin to save money, which is the foundation for building wealth. The opportunity to consistently save, over time, enables working families to begin to feel a sense of financial security, dignity and independence regarding their futures. The panel will discuss the prevailing tax system, and what may be needed to achieve long term, inclusive, systemic change.


  • Tim Flacke, Commonwealth
  • Ashley White, Director of the Economic Mobility Lab in Boston
  • John Baylor Jr, Director of Lafayette Square Holding Company
  • Fred Goldberg, Skadden Arps


NCRC video transcripts are produced by a third-party transcription service and may contain errors. They are lightly edited for style and clarity.

Flacke, 01:00,



Flacke, 02:00

my name is Tim flocka. And I am the co founder and executive director of Commonwealth. And I’m incredibly pleased to join to welcome you to this panel on building an inclusive tax system. We have fantastic panelists today who represent just great experience in government and federal and local levels in the social sector, in philanthropy in the private sector. And I’m super excited to get the conversation started. I didn’t want to briefly introduce, as I said, I have the privilege of leading a national nonprofit named Commonwealth and our focus is financial security and opportunity for the people who need it most working people in this country who are we know disproportionately people of color and women. And we do that work through innovation and through partnerships. And over the past 20 years with that mission, we have really intersected with the tax system a lot. And that means not just tax policy. But as we’ll talk about today, how that policy is actually administered in the real world and how it touches down in in in real family’s lives. At moments that has meant really making the link between large tax refunds and saving possible through something called split refunds and later through an option to purchase us savings bonds right through the title of the federal tax filing process. And over this past year, when we saw a sort of looming crisis, that many families who rely on the Earned Income Tax Credit might not be eligible for it after unemployment last year, we rallied together with two other organizations, savor life and neighborhood trust and launched a campaign to make families aware of a provision Congress passed called the look back, you can read more about that on a website called tech tax crisis.org. But as we switch to the panel, one of the few perhaps remaining rituals that nearly everyone in this country participates in is filing an annual tax return. Last year, nearly 170 million households have filed tax returns. And while the popular notion may be that this is a, you know, everyone is doesn’t like taxes and doesn’t like to file taxes. The reality is that the overwhelming majority 125 million households receive refunds every year. And in a recent year, the average refund was nearly 20 $900. So for households at the median income in this country of about $65,000. That’s closing in on 5% of their annual income in a single moment. And of course, as we think about households on lower incomes, the importance of both the those refunds, and frankly, the size of those refunds rises. So with that context, we now have several rounds of economic relief payments. And most recently, the American rescue plan Act passed earlier this year. And now the tax system is just even more important, with so much more at stake. So with that context, I’m incredibly excited to be joined by a fabulous panel. And I wanted to start the conversation today by asking them all to just briefly introduce themselves. And they each come as you’ll see with really different experience of the tax system and to just say a few words, given their experience, but what they see as the potential of this enormous infrastructure that as I say, almost every household in the country touches every single year. To get us started, Ashley, why don’t you? Why don’t you take the first the first response.


White, 03:29

Right. Thanks, Tim. Hello, everyone. I’m Ashley White. I’m the director of the economic mobility lab at The city of Boston, we primarily research and test innovative solutions that help promote economic mobility for Boston’s low to moderate income residents. And as you know, we’ve concentrated on work like childcare, emergency savings, and then most recently, really focusing on this tax season and working with Commonwealth to spread awareness about the look back in terms of the potential and role of the tax filing system, you know, the the first thing that sort of came to mind was the, the depth and breadth of this system, and how much potential I think it has to be, you know, a power to redistribute wealth, you know, throughout the the US. So, just an example, the the earned income tax credit, you know, in 2018, I think it was $65 billion were spread across tax filers via refunds. And 97% of that went to families, and 5.8 million people were moved out of poverty because of that tax policy. So, and we also know that, you know, the families who received those refunds, use it on really important things that provide financial stability, like, you know, home improvements, repairing a car, school supplies for their children, paying down debt, bills, that sort of thing. So really important necessities for families to sort of stay afloat. So I think that the the system has a lot of a lot of power, a lot of potential. Obviously, there are a lot of flaws, which I think we’ll we’ll get to later. But then also, you know, with the addition of the American rescue plan act, you know, I think that really shows how much power this system has with the expansions that the Biden administration was able to put through Congress.


Flacke, 05:17

Thanks, Ashley, Don, how about you?


Baylor Jr, 05:20

Yeah, sure. Don Bailey, Jr, currently managing director at Lafayette Square Holding Company, which is a newly created black owned, impact driven asset management firm focused on affordable housing, good jobs and financial inclusion for asset managers and a broader LMR population before that, and so we are committed to providing access to free tax prep within our affordable housing properties, as we as we stand those up over the next decade, in which we hope to house 100,000 residents and create 100,000 jobs with low and moderate income companies. Before that, I was at the Center for Public Policy Priorities. Now every Texan where I both coordinated a statewide tax time savings campaign, largely around savings bonds and other vehicles, but also advocated in the statehouse, around New access for Ei, TC, as well as community tax centers, I was part of a statewide coalition of community tax centers. And so it’s really, you know, a pleasure to be here, and really kind of elevate the importance of community tax infrastructure within the system. You know, within the federal tax filing system, I think when we think about the American rescue plan, you know, I think about 520, nines and children’s savings. And so we do know that there is a huge children’s savings gap, including a 529 savings gap, both by race as well as by income. And so thinking about ways to get creative about how

we might be able to provide additional support for families to open up CSA is if they do not currently have one. And so being able to match their credentials, you know, with various state boatswain nine programs with the tax filing system, I think would be a real way to expand access as well as you know, it, you know, build awareness about the importance of saving for college.


Flacke, 07:33

Thank you, john. And Fred, how about you?


Goldberg, 07:38

Thanks, Tim. Pleasure to be here. And thanks for the hosts of this program. It is both timely and central to what needs to happen. Personally, I am currently at Skadden Arps of counsel. I am at a point in my career where I get to spend some of my time on tax the other half my time on pro bono public interest, diversity and equity issues and underserved communities. But prior to that, trace points in my career I’ve served as the IRS Chief Counsel. I have served as the IRS commissioner and I have served as the assistant secretary tax policy. So this subject is very near and dear to my heart. And the IRS is far more than an informed law enforcement agency. A better way to think about the IRS should is is far In a way, the largest, most inclusive financial platform in our country. Now, there are folks who slipped through the cracks, because they don’t file returns, those tend to be the most vulnerable, most disadvantage, and disproportionately members of minority communities. What the IRS does, in terms of its reach to the American people, is massive. And the possibilities are endless. As Don mentioned, as Tim mentioned, as Ashley mentioned, the most recent legislation comes far away towards the social safety net. But as we move forward, it’s important to rethink to some extent the IRS role. As we broaden the social safety net, if we focus on issues such as emergency savings, as we focus, as Tom mentioned, on savings accounts for children, because we consider what technology can do today, both for better and for worse, it’s important to think through what the IRS mission is, in the short run, the single most important thing the IRS could do is effectively implement the expanded child tax credit. That is a transformative proposal. But beyond that, how does the IRS think about its job? is its job chase the cheat? For sure the tax gap is a horrendous problem. The also IRS also has the capacity to deliver important pieces of what Congress intends and what Congress intends is to make it work right. For everyone, minority communities, low income communities, that’s the job. Thanks.


Flacke, 10:33

Well, no surprise, you guys have all illustrated exactly the point that the tax system, the IRS communities that helped deliver the tax experience, the possibilities of wealth creation, you know, there’s enormous potential, what I’d like to turn the conversation to is, what is it going to take to realize some of this potential? Who are the actors who need to do what jobs? And again, each of you have a wide variety of experience? So I think, Well, here’s some, some different answers on the who needs to do what side of this? And, Tom, why don’t why don’t we start with you, from your perspective? Who needs to do what to see some of this potential?


Baylor Jr, 11:14

Yeah, I mean, I think you know, you know, wearing a former funding hat, I was always just just surprised at how much community successful community tax programs had to scramble for funding. And in my opinion, it should not have to be that way, in many ways, whether or not it’s through digital, or through face to face, they are critical connective tissue, between communities, and the IRS. And so we need to find permanent, I know that there is a federal program that does this at $30 million a year that I think there’s been a very positive development to support those. But I think that we need to go further in terms of local funding, as well as state funding, as well as philanthropic funding to make sure that there’s adequate resources to reach hard to serve communities. And I think, you know, hardest serve committees are called that for a reason, because it takes longer, and it may cost more to reach those folks. But it is critical. And as Fred said, I aligned with the intent of Congress with this particular legislation. And I do think, at the federal level, really thinking about how we really, really use and leverage the full origins of the federal government. I think about housing from Fannie Mae and Freddie Mac, what they can do in their financing of multifamily as well as the portfolio that HUD oversees. And so I think there were just I think this really requires an interagency approach, which I think child poverty obviously requires that type of approach. But I think ctci IRS and Treasury need to be, you know, really at the center when we think about an interagency approach to child poverty, as well as family economic security.


Flacke, 13:18

Thanks, Don. I just, I was struck that I’m not sure when people think about taxes, they always recognize to your first point, the role of communities and community organizations and I think that’s a great segue. Actually, I think you can speak to some of those from your experience. Can you point that, you know, tell us how Communities and Local Government plug into this.


White, 13:37

Yeah, thanks. I think it is a good a good segue. So I think, as Don was, was saying, you know, the the community sort of tax preparation sites are really, really important. And from my perspective played a big role in what we’ve done in Boston over the past couple months. So we call them VITA sites. They’re free tax preparation services to Boston residents. And in Boston, the vitesse sites this in 2019, served over 12,000 taxpayers. And, you know, that was an average return of about $2,000. And so they play a big role in in tax preparation and making sure that folks get their their refunds. But we had, we had to do this tax season because it was so complex, and there were all these sort of new policies with the look back, it took an immense amount of coordination, which I think dawn sort of alluded to, you know, the I think the city is certainly well positioned to be the one to be that convener, because we are on the ground, we know, you know, the community, we know the players. But, you know, for us here, we were taking out, you know, advertisements in different ethnic media, we were coordinating with the Office of neighborhood services, we were talking to external stakeholders like United Way, really trying to make sure that we got this message out in every way possible. And using all the different levers that the city had, at its at its at arm’s length. But then the last thing to that, I would say, in terms of resources, right, it takes all that coordination, and, you know, some of these, some of these sites, and some of these agencies are, you know, lacking in the resources to reach even more people than I think, you know, we have and so, I would say to that, you know, to realize some of this potential for more federal funding, you know, grants. I know, Don mentioned one, but continuing to invest in these localities invest in these

nonprofits, these community based organizations to make sure that they can reach those vulnerable communities would be ideal.


Flacke, 15:39

Thanks, Ashley. And, Fred, you’ve been at the very center of the other side of the table in what it’s like to run the IRS, maybe you can give us your perspective on the who needs to do what


Goldberg, 15:51

Sure Tim. And having been lucky enough to run both tax policy and the IRS, there are all sorts of policies, or all sorts of theories are all sorts of ideas. The issue is what Donna’s saying and what Ashley is saying, it’s all in the execution. I can sit up there my penthouse and make all these great theories that help vulnerable communities. But it happens downstairs in the street. And that’s what’s so important here is the execution. Let me give you a simple example. Most taxpayers when they file their returns, provide enough information to know whether they’re eligible for the earned income tax credit, the childcare, credit, child tax credit, is the IRS job. Chase the ones they think of cheating, or as an important part of the IRS job to reach out to those who don’t claim what Congress intended. And let them know. awful lot emphasis on the former, there’s not much emphasis on ladder. The second point goes to what Ashley was saying. The IRS reaches lots of folks, but it doesn’t reach everybody. A homeless, most vulnerable among us. Well, who has that information? Ashley’s got that information? Boston has got that information. And I agree with Don on collaboration and cooperation among federal agencies. But the partnership if this is gonna work needs to be with state and local governments, because actually, you’re the folks who knows what’s going on. Thanks, Tim.


Flacke, 17:43

That’s fabulous. I, one of the things we talked about when we were chatting ahead of time, you know, getting ready for this was this concept of reverse engineering, you know, really starting with Who are we trying to reach? Because we have good reason to think they they are hard to reach? And then how do we work backwards from who knows them? Who has relationships, who has the data, who has the experience? And that was certainly going through my mind, you know, listening to this last, last round of answers. I think we’ve touched on this already. But I did want to just take a moment, you know, if there are particular challenges in trying to realize this world where the tax system works for everybody, and the enormous sums of money that already flow through it, and we’ll talk about this more in a minute, the additional psalms under the American rescue plan. What are there are these particular challenges that we haven’t really shined a light on yet, especially for this audience who are Enormous Lee capable and sympathetic to the to the cause, it might be useful to kind of point out some of the the extra things we need to keep an eye on. Fred, can I can I come back to you first on this? Is there anything you haven’t had a chance to weigh in on in terms of challenges?


Goldberg, 18:54

Tim, I am a broken record, man, it’s all in the execution. And the IRS has been systematically hammered more than a decade, the IRS needs more funding. Again, not just for enforcement, but to fulfill its compact with the American people. Service is just what matters most because most, most of us most families in America, I get a W two, the information is there. But it shouldn’t take hours or days to reach the government. So service matters as well. The second piece is long term funding, no person would ever dream of running a business, or they got an annual budget with no idea whatsoever what the next year’s budget was going to be you can’t do anything. So it’s more funding. It’s long term funding. And it’s technology. The same technology that can deal with upper income folks who aren’t paying what they owe, is the same technology that can work for the rest of the country. So its long term funding, its technology. And it’s a reorientation towards serving everyone in these, particularly the hard to reach communities like what DOD was talking about the folks in Boston, like what Ashley was talking about. So that’s what I meant.


Flacke, 20:28

I really, really appreciate that comment coming from from you, Fred. Because I think, you know, it’s not always the first thing that comes to mind that we need to think about the IRS itself, and making sure that it has the resources to do the things that we all now increasingly want it to do to achieve the policy outcomes. So I think that’s really, really important. Actually, I wonder if you want to?


Goldberg, 20:51

Can I make another comment, Tim? Is this is the most exciting time. For an old guy, he used to live with the IRS in 40 or 50 years, because the Congress of the United States, this administration is paying attention to what he desperately underfunded under support an agency can do. I’m just getting out of balance here, Tim, but here’s the plug. You’ve got a very receptive Congress, you’ve got to read very receptive administration to get both this giant tax cap, principally at the high end, and the needs of these communities. So let’s all give them a cheer and hope it happens. Sorry, apologize.


Flacke, 21:55

No apology needed. Oh, that’s great. Ashley, is there anything you want to pick up on on this one?


White, 21:50

Yeah, for sure. I think just two things before I get to a bigger chunk that I want to touch on. But one is, you know, the burden of all this is really on the taxpayer. Right, especially when it came to the look back, right, the policy was created, but it was really on that taxpayer to kind of figure out, how do I maximize my refund, where do I have to go, and that’s where kind of the local government kind of stepped in and tried to spread awareness. But that burden is on the taxpayer. And I think, you know, for more affluent folks, you know, they can sort of pay their way to ease right into navigating the system. And that’s just not the case for low to moderate income folks. And so I think there’s some challenges there. And I think there’s some, some work to be done in terms of simplifying the process. We also had, you know, a pretty funny conversation before this too, around, you know, limited data and how we find these low to moderate income folks. And, you know, we were talking about, you know, how 20%, roughly or so, don’t file who are eligible? And even that data come in some some folks even question, you know, whether that data is valid or not. And so I think that there’s a need for more data. But I think it was funny, because we had this conversation about it. Well, the IRS, the IRS knows how much I make, they know where I live, they could literally take money out of my bank account if they wanted to. But yet, you know, we’re not using sort of the full power of the system to find these people and and use the federal government to do some of this outreach. So I think that that’s really important. And then the last thing to that I would say, there are a lot of complications and challenges because of COVID. So you know, these vitae sites provide essential services to Boston residents and they do a really good job at it. But you know, COVID made things a little bit more challenging because services that used to be provided person, we’re now moving online. And so that meant that there were more touch points that needed to happen, you know, the person who would come and drop off their, you know, tax paperwork, if the tax repair had a question or something was wrong, it would, you know, require the person to, you know, get in contact with that tax file or have them come back to the site. And so I think that there are some challenges there. And I think when we look ahead to the next year, you know, if things are still you’re not fully 100%, in person, there needs to be some some preparation work that happens there to make sure that that process is a bit more streamlined.


Flacke, 24:08

I love that point. I think we’re all at a place where we’re looking forward to hopefully the world, you know, quote, unquote, returning to, you know, back to the way it was before COVID. And yet, I hear you’re challenging us actually, to assume we’re still gonna have some issues next year and begin preparing now. So that seems right. Tom, what are your thoughts on this?


Baylor Jr, 24:25

Yeah, actually, I’m a simple guy. And so for me, it’s data data data is Ashley was referring to, I harken back to what the Department of Education did around FAFSA, the Free Application for Federal Student Aid, you could get data down to the campus level, on a bi weekly basis, because they, because there was a political will to do so. And so therefore, principals and others could identify folks to actually apply and do outreach and target outreach. So you can’t manage what you can’t measure. And so we are not able to, to do the measuring and in the prompt enough time, a lot of times the data is two to three years old, by the time you get it. And so that I think is part of the infrastructure package for the IRS, if there is one is thinking about how to leverage the data that they have to improve outreach and uptake at the local level.


Flacke, 25:41



White, 25:47

I also just add one thing Tim’s if that’s okay. Absolutely. Um, I was I was thinking, reflecting on this panel about you all the work in this might be, you know, you want me to save this for later, we can pause, but all the work that’s going into, you know, vaccine equity, right, and all the outreach that the federal government is doing to make sure that vulnerable communities can reach the vaccine, they’re putting vaccine sites, they’re using community health centers, right? Why aren’t we doing that for Texas? Right. So I think, and and, you know, again, going back to the data, they have the information. And I think that there’s a greater role that they can they can play there.


Flacke, 26:19

I think that’s just so well said it feels like as a country where we’re more we understand the concept of equity better today than we did even 18 months ago as an ideal, but applying it to the tax code seems like it’s work yet to be done. And when some households have so much more at stake in getting it right, and being connected to the system in getting what they’re do, it just seems to make so much sense that we need to go that extra mile to make sure those are the households who get the resources. But I want to do is that, you know, we’ve touched on the impact of these American rescue plan. And let’s, let’s just get into that a bit. And just make sure we’re all on the same page, you know, in that bill are many, many things. The estimate I’ve seen is $410 billion going directly to households, primarily through tax provisions. But this includes an enormous expansion of the child tax credit, as we’ve already talked about, and the beginning of periodic payments, the Service says it will begin those in July, as well as and we’ll see the impact of this next tax season when people are filing for 2021 refunds and expansion of the EITC and the child, Child and Dependent Care tax credit. And other provisions. I’m probably not remembering right now. And I have to say, you know, a Commonwealth having worked on financial security for low income households for years, the number of times we’ve said some version of people just have more money, everything we’re trying to do would be that much easier. It’s almost one of those things you don’t even say out loud anymore, because it’s so so, you know, regular thought. And yet here we have this moment when enormous sums of money are beginning to move. And so with that, I just wanted to take a minute and go around and ask for your thoughts about what are the particular opportunities created by the American rescue plan? What are the particular needs and especially for this audience who are connected to communities who are used to raising their voice to policymakers? What are the important things they should be thinking about to make sure we get the most possible return on this historic act? Don, I’m gonna gonna come to you first on this one.


Baylor Jr, 28:25

Yeah, you know, I think I do want to just, you know, circle back to the point around child poverty, which I think is really you know, somewhat of a moonshot. You know, for reducing child poverty over the next five to 10 years, if we’re able to get it right, and we’re able to make a lot of these things permanent, you know, and I do think, understanding the data, and also how to drive uptake. Because I think these monthly payments are really, really critical. I think you’re talking about income smoothing and supplemental mechanism that is likely to have bigger impacts in certain parts of the United States will show up poverty is the highest, like the South. Right, and we’re wages are the lowest right, and where predatory lending is the highest. And so I think, you know, the other impacts that I’m really interested to see is kind of what does this do, to subprime borrowing, as people have, you know, potentially more cushion, you know, on a periodic basis, as opposed to the lump sum, which we know has, you know, benefits and advantages, but having a lump sum and periodic payments is kind of like having your cake and eating it, too. So, you know, every everyone wants to be able to do that. So I think that’s a good thing.


Flacke, 29:52

That’s great. Fred, what are your What are your thoughts on the, on this moment, the American rescue plan.


Goldberg, 29:58

And, Tim, I apologize. I’m digressing once again, but I want to pick up on what Don said about data. Ai, I strongly recommend reading Professor Browns book, the whiteness of wealth, and how the tax system compounds in equity. It’s a fascinating read for tax person. It’s also fascinating read for everybody else, because the data she pulls together. So in terms of priorities matter, you can’t do everything. You can’t train the ocean or the spoon. To me, the single priority is making the child tax credit permanent, that gets exactly what Dan is talking about. The future is our kids. We do an awful lot for all folks like me, we don’t do nearly what we should. Young kids in this country, especially vulnerable kids. And that must lead flow of money is transforming. It’s transforming like Social Security. It’s transforming like Medicare, Medicaid. It’s transforming like the EITC. So the single priority, at least in my judgment should be make it permanent. That’s a very heavy political lift. But the other issue is making that administer. One of the interesting developments is the IRS is always behind the IRS has all sorts of jobs. And I think it is fair to rethink how to execute permanent one of the interesting developments, from my perspective, is senator Romney, who proposed making it permanent, and running it through the Social Security system. Other work, including work, that Commonwealth that Tim and his colleagues are doing, are thinking about different kinds of payment platforms, for now, do it with the IRS get it right. But in the real world, they get permanent, and figure out how it’s going to work easiest for the folks has tended to reach I’m done. That’s what should happen, at least in my judgment.



I think that’s, that’s great. And I’m guessing there probably many people who are watching today who agree that permanence of these monthly payments is really a, you know, would be just a fantastic development. I would also one thing we’ve wondered about is, you know, sometimes even a great policy that stumbles out of the gate, faces a steeper climb, right to get institutionalized or made permanent. And with that thought in mind, I am really interested actually, in your perspective, as at least, you know, in the current state, you may be closest to where the rubber meets the road. And I’m curious what your thoughts are about how this how this enormous new policy rolls out in such a fairly fast time and why we should be thinking about it.


White, 32:54

Yeah, well, I think, luckily, luckily for us, we have a little bit more time than we did with the stimulus bill in December, right to kind of prepare for this tax season. So that’s, that’s a plus. But, you know, I think I think I kind of go back, I don’t want to sound like a broken record. But I think, again, you know, more investment and more resources to help us expand our outreach is going to be really, really important. And I also think, you know, planning ahead, right, trying to sort of understand what the implications for this are on the local level, who, who is, you know, most important to kind of reach out to I also I’m also thinking, you know, as we’re sort of talking here, you know, there’s people who have been eligible, right, and now they’re eligible, and they file every year. But because of this, this legislation, you know, there are folks who were not eligible before who, who now are. And so that’s a whole different ballgame right of trying to really find those people and make them more aware of, you know, the impact that this policy can have on their life. So I think it’s going to take a lot of a lot of work, a lot of planning ahead and continuing that, you know, collaboration, that coordination that the city of Boston has played in the area.


Flacke, 34:05

Oh, that’s great. And I think a piece that’s come up in all your answers is that this concept of recurring monthly payments, you know, is is somewhat new for a tax credit, perhaps entirely new. And so to your point, actually, about trying to think how to reach out to different communities, part of the message now needs to be not just file your taxes, a message that, you know, frankly, there’s a lot of practice with, but a message about making sure you have provided the right destination to receive those monthly payments. And, you know, I’m struck by the parallels, Fred, to your comment about, you know, it’s no way to run a federal agency, not knowing what your budget is, from year to year, it’s no way to run a household, right, not knowing what your income is week to week, but that’s the reality. And for at least the second half of this year, 10s of millions of households will be able to count on these recurring payments. And that should open up possibilities if we can explain what’s coming and give people the support to think about what doors that opens. To pick up on one of Don’s earlier comments, including something very aspirational, like saving for your kids long term future. If you knew for certain you were going to have $600 payments coming in for the next six months, you know, that might be a moment you’ve never had before, to say I can afford to put $10 a month aside for this, or $50 a month aside for that. So these are all the things we need to think about in the coming in the coming weeks. So one, one thing that’s already come up, but I wanted to talk about it explicitly, is the opportunities around racial equity created by this moment. And you know, if we’ve already talked about the enormous sums of money, and the fact that we know not all Americans have the same amount at stake in being a part of the tax system. But my sense is maybe there is more we can do to have this moment amount of progress on hundreds of years of racial inequity. And I thought, actually, why don’t we come back to you first on this one? Is there anything you’d like to add? In terms of bad question? How do we think about racial equity in the tax system in this moment?


White, 36:08

Yeah, well, I mean, I’ve been thinking about it in sort of two, two buckets. There’s the bigger picture, which I’ll let, I’ll let Fred, maybe comment on in terms of the systemic changes, right, within the tax code, that, you know, have been that way for, you know, 10s, decades and decades and decades, and, you know, need some need some tweaking to sort of really reflect the country that we are now, right. And I also think on the ground, though, more locally, like I’m thinking about, like, what can I specifically do, and I think what’s important for the city is to sort of keep our eyes and I know, I sound like I’m repeating myself here, but you’re making sure that those vulnerable communities can maximize their tax benefits. And and, you know, that’s the most important thing for us. And so, you know, we’re over the next, you know, months, we’re going to be doing a lot of work around thinking about how can we improve our outreach efforts now that we have a bit more time to kind of prepare and think about this and understand, you know, the implications of this legislation? How can we reach those vulnerable communities? And I think, you know, what’s a good thing is that the pandemic has, in some ways, provided a nice roadmap for us, you know, folks are doing doing these types of outreaches in different ways, you know, vaccine related testing related, that sort of thing. And so I think there’s a lot to learn over the past year as to how do we kind of improve our outreach efforts, but I would say, just on the ground, it’s really important for us to continue to further our efforts on reaching those vulnerable communities, but I’ll leave the high level discussion about tax policy in the system, to the experts on the panel.


Flacke, 37:47

Thanks, Ashley. Todd, let’s go to you next time. This one, what are your thoughts?


Baylor Jr, 37:50

Yeah,I’m actually gonna go a little bit of a pivot here to think about the corporate tax system in particular CRA and, you know, I know there’s been, you know, Community Reinvestment Act. I know there’s been a lot of discussion about you know, you know, CRA 2.0. You know, what we need to do, particularly around kind of how race and income come together in America, but thinking also just about how we might connect CRA investments to corporate business tax systems, right right now, the the incentives are pretty light and not really connected, very much to the taxes that they pay. And so just just really thinking about different ways to direct investment in these communities through a broader understanding of the tax system, just kind of a broader advantage of the tax system outside of the personal income filing tax system.


Flacke, 38:54

Thank you for that Alright, Fred, you get to round this one out, let me get thoughts on using this moment around racial equity.


Goldberg, 39:03

I’m very privileged person, I get to spend a fair amount of time working with Robert Smith, on his praise initiatives. It’s all about capital. My judgment is judgment, which is what matters a hell of a lot more getting capital deployed in these communities, in ways that work for the communities. And whether you’re talking about opportunity zones, whether you’re talking about low income, housing tax credit, whether you’re talking about the market tax credit, whether you’re talking about ways of moving capital into these communities, whether it’s education based, whether it’s healthcare base, whether it’s community ownership base, whether it’s opportunities for all members of community have ownership, interest in community investments. There’s so much out there, the folks who have been experimenting with and all of these areas, job training, and they’re all there. And the tax law can play a very important role in getting those kinds of activities. Where are they belong? with community based goals in mind, investor goals are fine, if you want to invest. But those investments done properly through the tax code for the incentives tax code provides, can get the capital where it belongs, serving the communities that should be served. Now, that’s all blue sky. But those of us who live in the tax world are confident it could be done. And it’s question of whether the Congress has


Flacke, 41:00

I think that’s a that is a great point for all of us to keep in mind at this particular moment in history. We are coming to the end of our time. But as I said, a couple of times, the way I view this, this presentation, this panel discussion today is we have the privilege of talking to probably a couple 1000 of the most activated, connected, accomplished resourceful people out there. And so with that in mind, I’d like to just end with a quick lightning round. What’s the one thing you think this audience should take away and remember, as we leave this conference on the question of how we build an inclusive, impactful tax system, and we’ll go Ashley, Don, and Fred, so Ashley, take it away? What’s your one thing?


White, 41:45

I get two? I think, again, it’s the it’s the resources that that the cities and localities need to make the impact that we can because we’re closest to the people. And then secondly, I’m really curious when advocating for permanent changes, of course, I think the city can play a role in that. And then I’m really interested to and seeing your what is the research and data that comes out of the AARP, right, after we’ve expanded the child tax credit, you know,You know, what have we found that that’s done? And how can we use that information to make these changes more permanent or advocate for better tax policy? expanding, etc. So not one word, but I did my best.


Flacke, 42:27

Excellent, Todd?



Baylor, 42:28

DOD, would totally concur with Fred’s recent statement about the importance of, you know, deploying capital and impact driven ways something that we’re trying to do at Lafayette Square, I think in terms of a big takeaway. I think, you know, once again, I think it is about reining this issue largely around child poverty and economic mobility, and in a public, private, but public meaning interagency approach to troubled child poverty with taxes near the center of that discussion. And so I think that that will help us kind of drive a local state national, really movement around the connection between taxes, economic security, child poverty and economic mobility.


Flacke, 43:18



Goldberg, 43:22

Thanks, Tim, I’m tempted to duck your question. But having seen all of this for a very long time, one of the lessons you learn it’s exactly what Tom said. You get what you want. Measure. Another lesson that you learn, I’ve learned, I think others have learned in the policy context is the risk of making the best the enemy of the good. That’s a hackneyed phrase. But misters not a happy reality. But it is a reality. When social security was first enacted, it was drafted intentionally to exclude women and persons of color. When the Fair Labor Standards Act was enacted, it was drafted intentionally to exclude persons of color women, that was the reality of their time. But look where it’s gone. The EITC, if you look at the the expansion under Republicans, Democrats, every Mexican Congress in the White House, it was a program that addressed poverty. And it worked. And so it was expanded. And I think that the keeping that in mind is that in many of these cases, the structure that makes the difference is what matters, the platform matters, the plumbing matters. Because if you get the plumbing, right, you get the platform, right. Future folks can imagine things we couldn’t imagine, to build on. If you get universal access to a financial system. Think what you can build like Tim, what you’re saying about these payments. And so I think today, a clear eyed view as to what the platform should be a clear eyed view is the what is unacceptable, now is important. And then go build on it may be a downer. But that’s what I believe.


Flacke, 45:36

And that is a fabulous closing comment, I want to really, really, really thank this group for bringing a wide range of perspective to a really interesting conversation. And I will just close with with this thought, speaking both personally for myself and from people in institutions. I know, I think a lot of us after a really hard period in the in the last 18 months, feel like we’re coming up on a closing or an ending or a conclusion. And I would actually say it’s the opposite. Congress has given us an enormous but incomplete opportunity in the form of the American rescue plan act and what may come ahead. And this exhausted as many people are, understandably, It’s on us to see that. And I think this panel is illustrated as an incomplete, but really, really, really historically promising opportunity. And we have to figure out what are the complimentary pieces at the community level in the private sector in further work from government. At Commonwealth, we want to do that to help people have financial security and savings and to get them into the financial system. And the invite is here to partner with us on that. But you all may have other ways you want to leverage this opportunity. So thank you again, and one, we’ll have a chance to take some questions, and we look forward to talking with all of you. Thanks again.


Flacke, 47:00

So hello to conference attendees. And hello to my fellow panelists. It’s really nice to have this opportunity to take some questions directly from the from the audience. And so we’ll just dive right in the first question to come across from Katie, how can local advocates support this work? And I assume this work is probably making sure people get the tax credits and tax refunds that they’re entitled to. But beyond that, just how to make this tax system inclusive and well served. Ashley, I’m gonna I’m gonna start with you on this one. How can local advocates support this work? Sounds good.


White, 47:44

Thanks, Tim. And thanks, Katie, for your question. So what what Boston did, and I think many other cities probably did, as well as you know, partnered with local organizations in the city. So Commonwealth, being one of those. And so, you know, what we tried to do is basically figure out who are all the different organizations and potential touch points that, you know, that folks have with taxpayers, and how can we sort of inform these folks of this, this policy and of this tax season if they don’t already know of it, and tried to sort of basically spread, spread our web as far and wide as possible. So, you know, reached out to folks like United Way of massbay because they’re very much involved in that in that Tax process, you know, we were communicating to, you know, ethnic media outlets, to hopefully try to reach folks in those communities. So I think, from my perspective, I think local advocates can play a part in spreading spreading the word about tax time, and the different credits that lower moderate income folks are entitled to. And I think also playing a role in obviously advocacy at a at a greater level for some of the policies that we discussed during the panel.


Flacke, 49:11

Thank you, Ashley. Fred or Don, is there anything you want to add on this one?


Baylor Jr, 49:48

Well, do you think, you know, one thing the American rescue plan does provide a pathway for, and obviously, this is a, you know, a pressing issue, near and dear to the heart of ncrc is around the racial wealth divide. There are items in there, you know, not just on the income side, but actually, student loan forgiveness, which is, you know, a driving force of the racial wealth gap. And so, you know, I think as we go forward, and we begin to measure the effects, the impacts of many of these, you know, federal pieces of legislation, I think that we can make a very compelling case for making many of these things permanent. And so because I think, when you start to potentially close the racial wealth divide, making an argument that you want to go back to what things were like before, I think, is a very difficult argument to make. And so I think, you know, I think there’s an opportunity for us, you know, really within the data within the measurement, so that we can really assess the impact of not just, you know, the child tax credit, but many of these other, you know, economic payments and benefits to folks. Because I think, turning back, whether or not it’s on child poverty, the racial wealth gap, I think that’s going to be a largely untenable position for those that are opposed to it. And so I would really like that to be, you know, kind of a driving focus for advocates who really care about the racial wealth divide as well as child poverty.


Flacke, 50:55

And I can just tag on, I think one thing that’s easy to overlook, is that getting stories into your local media, about the impact that these refunds and these, particularly the expansion of the child tax credit, what impact that’s having, it’s actually really, really helpful to see that pop up in your hometown newspaper, it doesn’t have to be the New York Times or The Washington Post a USA Today, advocates, including very sophisticated advocates in Washington can find and use those local stories. And so I would just say, it’s on all of us to tell the story about what’s working, and what’s being impactful. And to sort of assume that there’ll be a lot of forces that will naturally be looking for where it doesn’t work, or where something went wrong. You know, it’s sort of a rule of the universe. Those stories get a lot of attention. And it’s going to take all of us to make sure that the impact side is is highlighted.


Goldberg, 51:54

Say this is very brief, boat, volunteer. And now’s the time. Take it. It’s my advice. Listen to Don and Ashley. I’m just mainly Bs, but they know what they’re doing.


Flacke, 52:15

That’s elicit. Well, Fred. The next question, I think, is one you might want to answer. And that was if you could say a little bit more about the book that you referenced, or the Browns book, maybe just the title and the author and a word or two about why he recommended it. I think the audience would appreciate that.


Goldberg, 52:30

Sure, Tim, and you know, a lot of it is sort of deep text dive geek stuff. But But she captures some critically important things. And what she focuses on is not abstract. The inequity we see today, obviously started with slavery, that is a fact. But then you get past the Civil War. You look at the Homestead Act. You look at social security, and F LSA when it was enacted. You look at the GI Bill. And these are objective facts. You can’t argue with them. All you have to do is read the law and that is the source. The continuing source of the wealth gap in an equity in this country. You may want to run, but you can’t hide from those facts. And that’s, you know, it’s just it’s a very compelling case. But the other part of the story she tells is that the effects of our various systems reach beyond just persons of color, to white families in the Midwest that have been victims of the opiate crisis. And the challenge of figuring out what solutions shouldn’t be universal. And what shouldn’t be targeted? Is the challenge. And she makes all of this clear, please, for me, and in a way that hadn’t seen that clarity before.


Flacke, 54:30

Thank you. And again, I believe the book is the author is Dorothy Brown, and I believe the title is the color of Well,


Goldberg, 54:40

No, Tim, it’s the whiteness of well, the whiteness of Well,


Flacke, 54:43

thank you very much. We have another question. Don, this one’s directed to you from Fran, Dawn, you preach data, data data, what will the stats look like? When the racial wealth divide is better? How will we identify when what we’re doing works, you take that big one on,


Baylor Jr, 55:01

I will attempt to I do think we have to get better and more frequent about measuring the racial wealth gap, I am not very satisfied with the intervals and the frequency, the type of data that is used, I do think that we need to reboot in terms of how we measure wealth, particularly as it pertains to race. And so I think that is a very, very important step before we can actually begin to actually measure the impact of many of these measures, right, I just think, the three year interval, the way it’s done the lack of really good local data around that. And so I think I would really kind of challenge some of my data scientists in the field, to really kind of reimagine the way that we measure wealth in this country so that we can measure it in a much more efficient and timely matter and manner so that we’re not behind the curve when the advocacy time comes.


Flacke, 56:10

Thanks, Don. And I I’ll just observe one thing, smarter people than me have pointed out is that we have to keep track of our income every year as part of the tax filing process. Right. But we don’t we don’t report our wealth. And there are probably good reasons for that. But it’s just a fundamentally different public use case of the data? Well, I think we’re, we’re coming up on the end of the time, I want to just do one quick round and ask if there’s any final thought, especially knowing, for example, that the American families plan now includes a provision to extend the child tax credit for I believe it’s another five years, is there any final piece of advice that our audience should take back to their, to their work in their communities that can help make that come to pass the permanence of that expansion? Fred, I’m gonna start with you, then we’re going to Ashley and Don will give you the last word.


Goldberg, 57:14

I don’t know what the rules are about what one can say about political action. So I’m not going to volunteer anything.


Flacke, 57:24

All right. Well, I think sometimes that’s, that says more than saying the actual thing.


White, 57:34

Yeah, so I think for us, again, it’s, it’s about, you know, trying to maximize this policy on the ground, right. And what’s written doesn’t always end up happening on the ground. And so it’s sort of our jobs to make sure that that that happens. But I would also say, and this is sort of tangentially related, but I think that there’s a real opportunity here to take the child tax credit expansion and the expansion of the EITC and really sort of doubled down on some other efforts, right around financial power and that sort of thing. So if you’re going to have this, you know, tax time touchpoint you know, what other services can we provide? What other sort of tools and resources can we give tax filers to help them build wealth or become more economically mobile? So I think that’s going to be certainly a focus for us. Great


Baylor, 58:36

Great, you know, I’m gonna, you know, really kind of double down on what I’ve said previously, around the importance of framing some of these issues within the child poverty framework. I think that, you know, there is a good history, I think, in this country of whether or not we’re talking about the elderly, right, and poverty, the war on poverty, effectively cut poverty in half, you know, over a period of time. And so I think, I think there’s a lot more bipartisan support. If you think about, you know, really trying to defend the existing level of child poverty or wanting to go back to where it was, you know, pre the expansion of the child tax credit. So I do think there’s tremendous opportunity to really frame this issue around eliminating child poverty. I mean, I think that we you know, the, you know, as a moonshot as a as a as a long range goal, I think it is certainly possible to dream that scenario. And so I think that that is something that can animate quite a few advocates, but also, as I said, before, garner some level of bipartisan support. Because it’s really hard to argue that child poverty is good for the United States of America.


Flacke, 59:56

And Don, the thing you said a couple minutes ago, is on my mind that, you know, sometimes it’s really hard to take things away. And I think there is something that we can, we can all sort of factor that into how we approach this work, how we talk about this work, how we explain the impact. And one thing we’ve we’ve even wondered a little bit on my team, you know, if the financial services industry, for example, recognizes how powerful it is to have 10s of 1000s of families, or 10s of millions of families receiving recurring monthly payments, that’s not a bad thing that helps to create that sense that this is here. And it’s and a lot of different stakeholders recognize its value. So we need to, we need to think about, in my view, those who are sympathetic to the cause. And we need to think about other stakeholders who can recognize that this is in their interest. So I think we’re we are at time, Fred, were you trying to get a word in I couldn’t tell if you were raising your eyebrow, the way somebody at an auction does trying to signal. Alright, I want to just take this moment to thank all of you again for making the time to join us and have a really lively conversation. And really thank the audience for tuning in and listening and sort of joining us and thinking together about how we make the most of this moment and create the kind of inclusive tax system that attacks child poverty, that could gives people financial security and opportunity that attacks the racial wealth gap and inequity. And so I look forward to working with all of you to see see that aspect progress towards those goals. Thank you.




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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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