Tax and transfer systems in the United States are designed to be race blind, but they affect racial and ethnic groups differently because of each group's unique socioeconomic characteristics. These papers, sponsored in part by a grant from the Annie E. Casey Foundation, examine how well programs work for racial and ethnic minorities (and poor people generally) in three areas: public education, wage subsidies, and Social Security.
Sheila Murray, Kim Rueben
Education is a key pathway out of poverty yet schools that primarily serve minority students often fail to provide the educational opportunities available in predominantly white schools. A series of state court cases has addressed one cause of that disparity-the dramatic funding differences that result from reliance on local property taxes to fund schools. This paper finds that court-mandated solutions have succeeded in equalizing spending per pupil across districts serving minority and white students. However, much disparity remains in other measures of educational quality and outcomes.
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Adam Carasso, Harry Holzer, Elaine Maag, C. Eugene Steuerle
The Earned Income Tax Credit enjoyed marked success bringing low-income women into the labor force in recent years. At the same time, labor force participation stagnated for low-income or less-education men and declined among young black men. In the face of these labor market conditions, this paper analyzes several EITC reform options directed at increasing the EITC for low-income workers and thus drawing these men into the labor force. The paper estimates the cost of various proposals and suggests an additional proposal that breaks the EITC into two components, one focused on individual workers and one focused on supporting children.
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Melissa M. Favreault and Gordon B.T. Mermin
This paper reviews why Social Security fails to lift more aged low-wage workers and people of color out of poverty. It examines the payroll tax and benefit formula and reviews literature about OASDI outcomes by race, gender, and earnings level. It describes how mortality, earnings, disability, childbearing, immigration and emigration, and marriage patterns all differ across U.S. racial/ethnic groups, and highlights the importance of these differences for program outcomes. The paper then uses the DYNASIM model to examine lifetime OASDI redistribution under current law and a trust fund–neutral reform package that would enhance system progressivity and improve outcomes for some vulnerable to retirement poverty.
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