Economics in brief: Tax breaks worsened racial wealth gap

Next City, May 10, 2019: Economics in brief: Tax breaks worsened racial wealth gap

A new report finds that the 2017 tax reform put $143 a day into the pockets of a top 1-percent family, while middle-class households earning between $40,000 and $110,000 are seeing just $2.75 a day, according to an op-ed in the St. Louis American. Of the $275 billion in tax cuts given out in 2017, $218 billion went to white households, the report said. That’s because the tax cuts are skewed toward the wealthy, who are already overwhelmingly white.

The report, “Ten Solutions to Close the Racial Wealth Divide,” is authored by the Institute for Policy Studies, Ohio State University’s Kirwan Institute for the Study of Race and Ethnicity, and the National Community Reinvestment Coalition.

Solutions for closing that divide include baby bonds (federally managed accounts set up at birth), raising the minimum wage, and postal banking, as well as taxing the ultra-rich and studying the potential for reparations for slavery and Jim Crow.

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