This article is co-published by HuffPost.
When President Donald Trump last year signed into law the biggest tax overhaul in three decades, many experts concluded it was clear that most of the cuts went to the wealthy. Less clear was that the cuts disproportionately favor whites over minorities — a gulf that will likely worsen a centuries-old economic divide between the races.
The Tax Cuts and Jobs Act, signed by Trump last December, cut the income tax rates across the board for large corporations and many small businesses and partnerships. Individuals received tax preferences in the form of a temporary increase in the child tax credit and the standard deduction. They also received temporary reductions in individual income tax rates.
But over the next few years, the cuts become less generous for those earning the least — and that disproportionately affects minorities far more than whites, according to tax experts and a Center for Public Integrity analysis using Census Bureau data.
Lawmakers should have been mindful of that fact when writing the law, said Jay Soled, director of the Masters of Accountancy in Taxation program at Rutgers University.
“The tax act largely and disproportionately helps Caucasians at the possible expense of those who are non-Caucasian,” Soled said. Republicans didn’t have “an agenda [of] ‘how do we hurt the non-Caucasians?’” But Congress “should be proactive in trying to reform the tax code in a way that doesn't perpetuate or worsen income inequality,” he added.
The breakdown of tax cuts by race has implications for the upcoming midterm elections and for proposed additional tax cuts Republicans say they want to enact this fall. Earlier this year, Republicans seemed to feel that the cuts in last December’s the tax law would increase their chances for victory in this November elections — but that enthusiasm has since waned. So now many Republicans want to pass more tax cuts in the coming months, hoping that could further bolster their election prospects. Trump said in July that any new tax legislation passed this fall “will be more aimed at the middle class."