Tax Reform

Overview

Taxes – who pays for them and what they pay for – are key to making sure that Latinos are served well and fairly. A progressive tax system ensures that those who can afford to pay do so. However, various deductions and credits can make it so some do not pay their comparable fair share of taxes and others pay more than their fair share.

Changes to and reform of the tax system should not be taken lightly or done for mere political gain with a small select group. Rather changes should be considered with two goals in mind: 1) a healthy federal budget with adequate funding to key programs to further the economic development in the U.S., and 2) clear opportunities for low- and moderate-income workers to develop assets.

Latino and other low- and moderate-income workers pay their fair share of taxes and should have targeted tax programs to develop assets as well as programs that benefit Latino workers and families. Good tax policies can encourage effective programs beneficial to the Latino community and can foster asset accumulation. However, other tax policies can widen the racial/ ethnic wealth gap and impose a heavy burden on those who can least afford to pay. Lopsided tax cuts that largely benefit the wealthy can lead to less money for programs of interest to middle- and low-income families, including many Latinos, such as education, job training, and health care.

NCLR Position

The National Council of La Raza (NCLR) supports good tax policies benefiting low- and moderate-income workers to help them to save and to develop assets. Policies like the Earned Income Tax Credit and the Saver’s Credit ensure that low- and moderate-income workers are protected from some taxes and are rewarded when they save and develop assets. NCLR believes that permanent repeal of the estate tax would lead the country down the wrong path in terms of Latino priorities by draining key resources out of the federal budget at a time of high deficit. NCLR will be looking at various proposals to change the Internal Revenue Code and its impact on the federal budget, on state and local taxes, and on Latino and low- and moderate-income workers.

All Content © 2009 NCLR. All Rights Reserved