Research Report Racial Disparities in the Treatment of Capital Income in the Federal Individual Income Tax
Janet Holtzblatt, Laura Kawano, Robert McClelland, Gabriella Garriga
Display Date
File
File
Download Report
(1.92 MB)

Although the US tax code does not explicitly reference race or ethnicity, the federal income tax system contributes to racial disparities when factors that affect tax liabilities are correlated with race. This study is the first to use the Tax Policy Center’s microsimulation model—newly enhanced with race and ethnicity imputations—to analyze the disparate impacts of policy changes to the individual income tax on Black, Hispanic, White, and other families. We consider three policy options that could help mitigate racial disparities in income and wealth.

Research and Evidence Tax and Income Supports Technology and Data Race and Equity
Expertise Taxes and the Economy
Research Methods Data analysis Microsimulation modeling
Tags Federal tax issues and reform proposals