June 2015 U.S. Poverty Action

Building Community Support for Tax Policies That Expand Economic Mobility

Federal government policy is a key tool in the movement to end poverty in America. The Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) lifted 8.8 million people out of poverty in 2013, and SNAP boosted the income of 4.8 million Americans above the poverty line, just to name a few. In the short term, RESULTS is working to ensure key EITC and CTC provisions that are set to expire are made permanent in 2015. Over the longer term, RESULTS views tax policy as a critical instrument for addressing inequality in America, including the racial wealth gap. The background information further below provides basic information about the racial wealth gap you can use to educate and engage community partners on this issue.

Meanwhile, as many RESULTS volunteers finalize plans to lobby members of Congress at the RESULTS International Conference and/or in meetings back home, amplify your voice in those meetings by generating letters from people in your community urging lawmakers to protect and expand the EITC and CTC as their top 2015 tax priority. Here are some key steps to generate letters:

1. Create a list of 10 or more people you’ll ask to take action. Make a list of people in your local action network, friends and colleagues at work, online contacts through Facebook and Twitter, and others you know who might be willing to take action. Remember that not everyone you ask will write a letter so your list should include twice as many as your goal.
2. Make it easy for people to engage. Plan to go to events in your community and invite people to write letters. Many RESULTS groups table at community events, religious services, college campuses, etc. Share our EITC/CTC outreach action sheet with people, which includes simple talking points for letters. If people prefer, they can also tailor a letter using our online tax credit action. Make sure to bring paper and pens as well.
3. Share why you care about this issue. More than any statistic alone, your friends and family will be more moved to action when they hear why you are passionate about tax fairness and ending poverty. Also, if you can enlist people who have directly experienced poverty, or know the importance of the EITC and Child Tax Credit for their own families to share their stories, please do! These stories make a huge difference.
4. Let people know that their letters will make an impact. Tell people you would like to hand-deliver their letters to members of Congress at the RESULTS International Conference or in an upcoming lobby meeting in your state. Afterwards, share a picture of you in the Congressional office so they can see the impact!

Note: To find contact information for members of Congress, visit our Elected Officials page at: http://capwiz.com/results/dbq/officials/. For other advocacy tips, check out our Activist Toolkit at https://results.org/skills_center/activist_toolkit/.

As the income inequality debate has gained traction over the last few years, the conversation often ignores wealth inequality and the racial wealth gap. In 1963, the families in the highest income brackets had six times the wealth of families in the middle; in 2013, they had twelve times the wealth. Racial wealth disparity is even more striking: in 2011, for every $1 dollar that white Americans held in wealth, black Americans held only 6 cents and Hispanic Americans held only 7 cents. Discriminatory public policies, both past and present, and the federal tax system helped produce and now exacerbate the racial wealth gap.

While the Great Recession negatively impacted most American families, the impact was particularly damaging for the assets of families of color. In 2010, the ratio of white wealth to black wealth was 10:1; by 2013, that ratio increased to 13:1. Wealth for households of color comes primarily from homeownership and housing values have been much slower to recover from the Great Recession. White families are more likely to own stocks, which recovered their value more quickly, and this deepened this widening gap.

Homeownership is a critical factor in amassing wealth and the biggest driver in the creation of the wealth gap. Furthermore, the U.S. tax code includes over a half a trillion in tax benefits — deductions, credits, exclusions and preferential rates — that incentivize households to save and invest. However, lower-income households cannot access these benefits. Less than half of African American and Latino households own homes; thus, they are not able to take advantage of the $211 billion in homeownership tax subsidies.

But tax policy is not the only problem. History reminds us that residential segregation and the racial wealth gap also derive from racially-motivated public policy. As outlined by the Economic Policy Institute and in Ta-Nehisi Coates’s powerful piece in The Atlantic, “The Case for Reparations”, in the early Twentieth Century neighborhoods across the country created restrictive covenants to prevent racial minorities from buying homes. The Supreme Court ruled this illegal in 1948, but the Federal Housing Authority knowingly allowed this practice to continue. In the same vein, banks have historically targeted “redlining” (denying or overcharging services in specific geographical areas) and predatory lending towards communities of color, thus forcefully segregating communities and reducing the quality and opportunity of nonwhite neighborhoods. Understanding America’s history and tax system is fundamental to creating equitable public policies.

We will discuss strategies to engage others in our communities and the importance of speaking out about tax fairness and the racial wealth gap on our June national meeting (June 13, 2015, at 12:30 pm ET) with guest speaker Rep. John Conyers (D-MI): http://fuze.me/28130766. If you cannot join online, you can dial in by phone at (201) 479-4595, meeting ID: 28130766#. Plan to log in or call in no later than 12:25 pm ET.