Wednesday, October 11, 2023

NYU Tax Policy Colloquium: Jeremy Bearer-Friends Race-Based Tax Weapons, part 1

Yesterday at the colloquium, we discussed with Jeremy Bearer-Friend his new article, forthcoming in the UC-Irvine Law Review, entitled Race-Based Tax Weapons. This is a case study (but also drawing broader policy-relevant conclusions) of the following four twentieth century "poll taxes" imposed by Anglophone governments:

1) The poll tax that Texas imposed beginning in 1903 to prevent Blacks, and to a lesser extent poor whites, from voting. This was a uniform head tax of $1 per adult male that actually pre-dated the Civil War (at which point it was payable only by whites). Low as this may sound in terms of modern dollar values, at the beginning of the 20th century the bottom 76% of the Texas population only earned about $60 per year.  So, proportionately speaking, if you were earning $60,000 today it would be like paying $1,000.

After the Civil War and 13th Amendment, it was expanded to apply to all men aged 21-60. The big 1903 innovation was to tie it to voting - you couldn't vote if you hadn't paid it - and to make it payable at a different time and place than that of the elections themselves, with the aim of excluding disfavored voters from the ballot, rather than of collecting it from them.

2) A short-lived 1921 California poll tax of $10 (equaling the return to 30 hours of minimum wage labor) per male aged 21 to 60 who was an alien. Reflecting animus towards Chinese, Italian, and Japanese immigrants (the three most numerous immigrant groups at the time), it was struck down within a year by the state's Supreme Court.

3) A poll tax that the British Empire imposed in Kenya in 1934, to be paid solely by "natives" (defined as men who were of African, rather than European or Asian, extraction) with an eye to forcing them to work on English-owned plantations for at least 23 days in order to generate the cash that they would need to pay the tax.

4) The uniform "Community Charge" that Margaret Thatcher's UK government imposed in Scotland in 1989, then expanded after a year to England and Wales. It replaced property taxes that the local governments had previously levied to fund their outlays. It was a per-person head tax on adults, charged on a per-day basis, depending on the number of days that they spent in a given jurisdiction. Because of its extreme regressivity, as compared to property taxation, it caused mass protests in the UK that brought down the Thatcher government.

In contrast to these 4 examples, I don't think poll taxes / uniform head taxes are much on the agenda these days, which is certainly a good thing. But demogrants (i.e., uniform per-person payments to members of the eligible group) can be viewed as reverse head taxes. One might also say the same for refundable child credits, although these would only go to parents, not  everyone.

Of the 4 poll taxes in the case study, #2 and #3 are expressly targeted at particular racial groups, while #1 and #4 are facially neutral. The article argues, however, that all should be classified as "race-based tax weapons." Moreover, it points to this essential underlying similarity as demonstrating that racism and white supremacy can be advanced by formally neutral or uniform rules, no less than by those that are overtly racist.

This claim is surely correct, albeit in tension with the US Supreme Court's increasing focus on formal neutrality (for example, in school admissions) rather than on substantive effects on racial inequality. But in my next post I will address the broader analytics of identifying race-based (or other, such as class-based) tax weapons as an important new substantive category in tax policy analysis. This will include asking whether or not, and to what extent, we should group Example #4 above with the first three.

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