How Republican Tax-Reform Plan Will Hit Blacks the Hardest

By Charles D. Ellison

Right now, at this very moment, the single biggest threat to the group of people already in a compromised position because of their race is the congressional Republicans’ tax-reform plan. Not the sound of the police. Not lead in your water and not a jail cell.

The tax-reform plan that both Congress and the White House are pushing seems obscure. It’s that thing only geeky Washington, D.C., insiders pass crush notes over, so you glance away from the television screen because it sounds irrelevant. It’s so innocuous, you ask, “What’s a tax cut got to do with me?” especially when shit is already tight. So long as you get that refund check for a down payment on that next car, you could care less.

As the latest YouGov poll (pdf) shows, you are among the vast majority of Americans who hate Congress, yet you’re probably in that 46 percent who don’t follow what congressional lawmakers do, including the nearly 70 percent of whom are black.

But black folks should be paying the most attention because we’ll feel the most hurt as congressional Republicans, along with an oligarchic Trump White House, try to make the plan into law (House Republicans passed their version of the bill on Thursday). Not only is black America the least likely to see a tax cut, but it’s also the most likely to see future tax increases, shredded safety nets, and a flurry of fines and fees to make up the difference.

If there ever was an issue to march against, it’s the ominous specter of a trickle-down tax-reform scam that’s about to decimate an already fragile black quality of life—not the imprisonment of a probation-violating rapper who’ll end up riffing an album off your tweets. Priorities, fam, priorities.

As Congress attempts to ram its tax-reform plan through to presidential signature, here are the five big ways this will screw everyone, but black folks the most:
1. Starving the Beast so It Can’t Protect You Anymore
It’s the resurgence of a decades-old hat trick by conservative Republicans to use fiscal policy as a weapon for diabolical political aim. The “beast” is the federal government. This term of snarky elegance appeared during the Reagan years as neocons mandated less government spending through a reduced federal budget, thereby setting up the last big tax overhaul in 1986.

As economist William Cunningham of Creative Investment Research said during an episode of WURD’s Reality Check, “This has always been about limiting the federal government’s ability to protect the most marginalized communities. The fewer resources the federal government has, the less responsive it is to the needs of the vulnerable.”

This is chilling for black folks considering the historic role of federal intervention on our behalf—even, ironically, when the feds sued Donald Trump himself back in 1973 for housing discrimination.

A tax-code overhaul, which complements Trump’s budget cuts (by the way), completes the erosion of everything from Medicare to Pell Grants to regular federal enforcement of civil, voting and labor rights.
Much of that has accelerated in less than a year under the new sheriff. Have a problem with hate crimes or a local plant spewing toxic fumes or racist management at your workplace or the school district underfunding your kids’ school because it’s majority black and brown?

Good luck with getting the feds to investigate or enforce rules because budgets will be slim.

2. Making Us Pay for Wealthy White People’s Tax Cuts
Straight, no chaser: This tax-code overhaul is a sophisticated, modern plantation play. But instead of working the fields, society will permit you to sharecrop your way to the appearance of middle-class normalcy through smartphones and selfie-induced materialism while the increase on your taxes pays for the boss’s tax cut.

As the Center on Budget and Policy Priorities points out, “Households with annual incomes over $1 million would see their after-tax incomes increase by 3.2 percent, 16 times the percentage increase for any income group in the bottom half of the income distribution” by 2027. Those with incomes between $20,000 and $40,000 would see an actual 2 percent tax increase by 2023, and “filers with incomes between $20,000 and $30,000” would see increases in 2027.

Why does that matter to black folks? Our median income in 2016, according to the U.S. census, was $39,490—a drop of 4 percent since 2000 while whites, Latinos and Asians saw modest income gains.

3. The Confederacy Strikes Back: Red States Get Paid, Blue States Get Mugged
The funny thing about this tax-reform bill is that it’s clearly a bloodless Confederate coup with less-populated red conservative Republican states (formerly in the Confederacy) engaging in a clever 150-years-later payback by drying up blue liberal Democratic states (formerly in the Union).

Political scientists Jacob Hacker and Paul Pierson put this on blast in their recent New York Times piece, arguing it’s a “Republican two-step: redistribute upward, then sideways.” The last time this happened, the authors note, was after the Civil War, when Northern Republicans (anti-slavery at the time) imposed punishing tariffs on Southern Democratic states to pay for Union veteran pensions.

Today Republicans—most of whom are from those formerly Confederate, now red states—run the union, which is why it pays to know the history. And the congressional Republicans in charge are proposing the elimination of popular state and local tax deductions, a $1.3 trillion cost over 10 years that hurts blue states while the benefits get transferred to the red states.

It’s comical because red states already get the most federal dollars, since they’re the poorest—and play-it-safe President Barack Obama made sure the Affordable Care Act took care of red Republican states, even while Republicans spit in his face the whole time.

But that’s just because red states would rather keep their poor and black population largely disenfranchised so new plantation owners (aka “bosses”) can still enjoy their spoils. And these are the states that are, as The Atlantic’s Alana Semuels notes, “the stingiest” toward their black populations.

4. Demolishing the Social Safety Net
Black people represent about 13 percent of the population, yet we collectively suffer from a 22 percent poverty rate—almost double the national rate—and the highest among all racial groups. As a result, we rely heavily on crucial social-safety-net programs: Nearly 30 percent of African Americans rely on Medicaid and/or food stamps, while 63 percent of black college students rely on Pell Grants, and 30 percent of all Head Start children and 46 percent of all rental-assistance recipients are black.

If the tax-code overhaul becomes law, the deficit spikes to $1.5 trillion or more in 10 years and naturally forces cuts on every last one of those programs.

Medicaid gets cut by 47 percent. Food stamp cuts will be 30 percent. Pell Grants and student loans would be devastated. K-12 schools funding would be reduced by 30 percent. Head Start would lose nearly 200,000 kids. Job-training cuts would rise to 40 percent, and nearly 1 million households would lose rental assistance.

5. The Price of Everything Else Will Go Up
It won’t just end with tax cuts. Republicans will starve the beast so bad that federal agencies will hike fees on us all to squeeze blood from turnips.

That could also mean a huge hit on the black middle class as the federal workforce hemorrhages. But the cost will be passed along to state and local governments, which will lose federal grants; we’ll then see more public sector job losses and yet another direct hit on an already fledgling black middle class that relies heavily on once secure public sector jobs.

Then struggling black folks who rely on a vast array of state and local public services will really feel the grip tighten as those programs disappear, not to mention the pinch from hiked fees on everything from parking tickets to fines to car registrations to sales and property taxes because governments will need to make up the difference.

“When we evaluate what the tax-reform plan will mean for black households, we also have to take into account the federal budget environment,” Camille Busette, director of the Brookings Institution Race, Prosperity and Inclusion Initiative, told The Root. “President Trump’s budget calls for cuts in a range of social programs from housing subsidies to programs that help support health and other social supports that are important to low-income and poor Americans. A miserly budget like that, in combination with the tax-reform plan, could mean the loss of some very important services.”

You might want to overwhelm Capitol Hill’s phone lines, folks. It’s about to get rocky.

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Glenda Bell Data News Weekly Contributor Brandy Galmon has been a registered nurse for 20 years, specializing in patient advocacy and
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