Are US federal and state income tax policies racially neutral? An empirical investigation

It is essential to incorporate a racial perspective into the study of public finance and tax policy. This research, using data from the U.S. Census Bureau, shows that minority taxpayers face a disproportionately higher income tax burden. Nonwhite families pay an average of $3,304 more in federal taxes and $1,465 more in state taxes compared to white families. Specifically, African American families pay $3,536 more in federal taxes and $1,288 more in state taxes. This disproportionate tax burden can be attributed to the higher proportion of income minority taxpayers derive from salaries and wages. Although federal programs like the Earned Income Tax Credit and Child Tax Credit have reduced these disparities, there is still a pressing need for more targeted policies to eliminate and potentially reverse the longstanding racial disparities in the U.S. tax system.