Leo Martinez (UC-Hastings) on "Latinos and the Internal Revenue Code"...

“Latinos and the Internal Revenue code:  A Tax Policy Primer for the New Administration”, Harvard Latinx Law Review (2018).

Leo Martinez (Hastings)

Leo Martinez (Hastings)

I have written several pieces on race and taxes, including one book and another on the way.  Yet, I am guilty of perpetuating the binary race model of black/white, without much consideration for how neutrally worded tax laws may affect Asians or Latinos, asymmetrically.  I have cited a few statistics here and there, as well as cited some of the few works out there, like Mylinh Uy’s “Tax and Race: The Impact on Asian Americans”, Asian American Law Journal (2004).  Still, “It bears emphasis that there is a dearth of scholarly work exploring the intersection of Latinos and taxation.”

Leo Martinez’ recent work, “Latinos and the Internal Revenue code:  A Tax Policy Primer for the New Administration”, Harvard Latinx Law Review (2018), helps close that gap.  This work follows one that escaped me while writing my first book, “The Internal Revenue Code and Latino Realities:  A Critical Perspective”, University of Florida Journal of Law and Public Policy (2011).  When discussing 20th century poll taxes in my book, Tax Law and Racial Justice: Black Tax (2015), I should have included his identification of 19th and 20th century poll taxes in Texas designed to disenfranchise Latino residents. Just as taxation was used to exclude free blacks from lucrative labor markets in the Ante-Bellum South, Martinez points to the 1850 California Foreign Miners Tax, designed to exclude Latinos from the California Gold Rush. 

[Black Californians involved in the California Gold Rush were stripped of every right of citizenship to exclude them, forcing many to re-settle in Canada, where they founded Vancouver.  See Shadow and Light, The Autobiography of Mifflin Wistar Gibbs. But I digress.]

Professor Martinez identifies several federal and state tax laws and policies that asymmetrically affect Latinos.  First, Latino families may receive an unfair share of the dependent care tax credit, since they are more likely to use extend family members for child care than for-profit day-care.  Latinos writ large are also penalized by the Code’s ‘marriage penalty’, which taxes marriages with one spouse working the least, unmarried working couples next, and married working couples the most.  Because Latino marriages are more likely than white ones to have both couples working, they are more likely to be ‘penalized’.

Latinos, like Black folks, offer a great deal of intra-family philanthropy which does not receive a charitable deduction.  Most Latinos would be ineligible even if the Code it did qualify, because most do not itemized anyway, taking “the standard deduction.” Like Black folks, Latinos are less likely to participate in tax-subsidized employee-pension plans.  This is because, one, Latinos tend more often than blacks and whites to work in occupations that do not offer 401Ks and such, and, two, Latinos have less wealth than whites to be able to forego a portion of each paycheck.  [I do talk about this in my upcoming book, “Race and Taxes in 21st Century Amerika”.]

For similar reasons (lack of wealth, insufficient income, standard deduction), Latinos are less able to garner subsidies relating to higher education tax deductions.  Like black folks, Latinos have less wealth to buy homes, thereby receiving disproportionately less tax deductions and exclusions relating to home ownership (mortgage interest deduction, state property tax deduction, exclusion of gain from a personal residence).

There is also the issue of tax “knowledge”.  Latinas do not receive their fair share of EITC benefits, in part because “Only 27.1% of low-income Latino parents know about the EITC. … In California, data from the Rural Families Speak Project survey found that the majority of qualified low-income Latino families living in rural communities may not be receiving the EITC.”

Martinez points out that undocumented residents pay a lot more in taxes than they receive in benefits.  Undocumented residents who own property are less likely to claim deductions and credits.  Most striking, “undocumented workers pay billions of dollars annually for Social Security taxes, even though these workers do not qualify for Social Security Benefits.”- DreSmith