Neal, Pressley Demand Answers and Action from Treasury on Racial Inequities in COVID-19 Response Implementation and Tax Code Administration
Jul 31, 2020
“As our country focuses on identifying and eliminating systemic racism, we have a duty to ensure that our tax laws do not perpetuate racial injustice.”
WASHINGTON, DC – Today, House Ways and Means Chairman Richard E. Neal (D-MA) and Congresswoman Ayanna Pressley (D-MA) expressed their deep concerns over racial disparities in the administration of the tax code as well as in the implementation of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The lawmakers emphasized, “at a time of racial reckoning for our nation, it is imperative that the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) review current policies and take immediate action where policies perpetuate discrimination.”
While the COVID-19 virus and subsequent economic fallout have disproportionately harmed communities of color, the Trump Administration’s implementation of the CARES Act left these communities behind. As the lawmakers noted, underbanked and unbanked Americans—who are disproportionately Black and Hispanic—have struggled to access their economic impact payments (EIPs), and minority-owned businesses have struggled to receive assistance through the Paycheck Protection Program (PPP).
“Our concerns are particularly urgent in light of the ongoing pandemic, as minority communities bear the brunt of its devastating effects,” Neal and Pressley wrote. “A recent report by the Urban Institute indicated that non-Hispanic White families received their economic impact payments (EIPs) faster than Black and Hispanic families. Similarly, it was reported that only 12 percent of Black and Hispanic business owners who applied for Paycheck Protection Program (PPP) loans received the amount requested. Sadly, one-half of these businesses are expected to permanently close soon. We must do better. It is unacceptable to leave these communities behind.”
Treasury also decided unilaterally that incarcerated individuals are not entitled to receive EIPs and stopped payments to their spouses and dependents outside of prison. The lawmakers stated that policy is “arbitrarily and cruelly targeting a population in which Black and Hispanic families are overrepresented due to systemic inequities in our criminal justice system.”
In addition to COVID-19-specific relief efforts, the lawmakers also called on Treasury to administer the tax code in a racially-neutral manner. The lawmakers noted, among other things, the IRS’s higher audit rates for minority households, unnecessary delays for low-income taxpayers to receive their refunds, and the IRS’s limited services for taxpayers with limited-English proficiency.
The lawmakers requested a report by August 15, 2020, on Treasury’s efforts to reduce systemic racism, including step-by-step plans to address these inequities and the rationale behind the Administration’s implementation efforts.
Read the entire letter HERE.