How Much are Local Civil Asset Forfeiture Abuses Driven By the Feds? A Reply to Libertarians

Sep 12, 2014Mike Konczal

(Wonkish, as they say.)

I wrote a piece in the aftermath of the Michael Brown shooting and subsequent protests in Ferguson noting that the police violence, rather than a federalized, militarized affair, should be understood as locally driven from the bottom-up. Others made similar points, including Jonathan Chait (“Why the Worst Governments in America Are Local Governments”) and Franklin Foer (“The Greatest Threat to Our Liberty Is Local Governments Run Amok”). Both are smart pieces.

The Foer piece came into a backlash on a technical point that I want to dig into, in part because I think it is illuminating and helps proves his point. Foer argued that “If there’s a signature policy of this age of unimpeded state and local government, it’s civil-asset forfeiture.” Civil-asset forfeiture is where prosecutors press charges against property for being illicit, a legal tool that is prone to abuse. (I’m going to assume you know the basics. This Sarah Stillman piece is fantastic if you don’t, or even if you do.)

Two libertarian critics jumped at that line. Jonathan Blanks of the Cato Institute wrote “the rise of civil asset forfeiture is a direct result of federal involvement in local policing. In what are known as ‘equitable sharing’ agreements, federal law enforcement split forfeiture proceeds with state and local law authorities.”

Equitable sharing is a system where local prosecutors can choose to send their cases to the federal level and, if successful, up to 80 percent of the forfeited funds go back to local law enforcement. So even in states where the law lets law enforcement keep less than 80 percent of funds to try and prevent corruption (by handing the money to, say, roads or schools), “federal equitable sharing rules mandate those proceeds go directly to the law enforcement agencies, circumventing state laws to prevent “‘policing for profit.’”

Lucy Steigerwald at Vice addresses all three posts, and make a similar point about Foer. “Foer mentions the importance of civil asset forfeiture while skirting around the fact that forfeiture laws incentivize making drug cases into federal ones, so as to get around states with higher burdens of proof for taking property...Include a DEA agent in your drug bust—making it a federal case—and suddenly you get up to 80 percent of the profits from the seized cash or goods. In short, it’s a hell of a lot easier for local police to steal your shit thanks to federal law.”

Equitable sharing, like all law in this realm, needs to be gutted yesterday, and I’m sure there’s major agreement on across-the-board reforms. But I think there’s three serious problems with viewing federal equitable sharing as the main driver of state and local forfeitures.

Legibility, Abuse, Innovation

The first is that we are talking about equitable sharing in part because it’s only part of the law that we are capable of measuring. There’s a reason that virtually every story about civil asset forfeiture highlights equitable sharing [1]. It’s because it’s one of the few places where there are good statistics on how civil asset forfeiture is carried out.

As the Institute for Justice found when they tried to create a summary of the extent of the use of civil asset forfeiture, only 29 states have a requirement to record the use of civil asset forfeiture at all. But most are under no obligation to share that information, much less make it accessible. It took two years of FOIA requests, and even then 8 of those 29 states didn’t bother responding, and two provided unusable data. There's problematic double-counting and other problems with the data that is available. As they concluded, “Thus, in most states, we know very little about the use of asset forfeiture” at the county and state level.

We do know about it at the federal level however. You can look up the annual reports of the federal Department of Justice’s Assets Forfeiture Fund (AFF) and the Treasury Forfeiture Fund (TFF) of the U.S. Department of the Treasury. There you can see the expansion of the program over time.

You simply can’t do this in any way at the county or state levels. You can’t see statistics to see if equitable sharing is a majority of forfeiture cases - though, importantly, equitable sharing was the minority of funds in the few states the Institute for Justice were able to measure, and local forfeitures were growing rapidly - or the relationship between the two. It’s impossible to analyze the number of forfeiture cases (as opposed to amount seized), which is what you’d want to measure to see the increased aggressiveness in its use on small cases.

This goes to Foer’s point that federal abuses at least receive some daylight, compared to the black boxes of county prosecutor’s offices. This does, in turn, point the flashlight towards the Feds, and gives the overall procedure a Federal focus. But this is a function of how well locals have fought off accountability.

The second point is that the states already have laws that are more aggressive than the Fed’s. A simple graph will suffice (source). The Feds return 80 percent of forfeited assets to law enforcement. What do the states return?

Only 15 states have laws that that are below the Fed’s return threshold. Far, far more states already have a more expansive “policing for profit” regime set in at the state level than what is available at the Federal level. It makes sense that for those 15 states equitable sharing changes the incentives [2], of course, and the logic extends to the necessary criterion to make a seizure. But the states, driven no doubt by police, prosecutors and tough-on-crime lawmakers, have written very aggressive laws in this manner. They don't need the Feds to police for profit; if anything they'd get in the way.

The third is that the innovative expansion of civil asset forfeiture is driven at the local level just as much as the federal level. This is the case if only because equitable sharing can only go into effect if there’s a federal crime being committed. So aggressive forfeiture of cars of drunk drivers or those who hire sex workers (even if it your wife’s car) is a local innovation, because there’s no federal law to advance them.

There’s a lot of overlap for reform across the political spectrum here, but seeing the states as merely the pawns of the federal government when it comes to forfeiture abuse is problematic. Ironically, we see this precisely because we can’t see what the states are doing, but the hints we do know point to awful abuses, driven by the profit motive from the bottom-up.

[1]  To take two prominent, excellent recent examples. Stillman at the New Yorker: “through a program called Equitable Sharing…At the Justice Department, proceeds from forfeiture soared from twenty-seven million dollars in 1985 to five hundred and fifty-six million in 1993.”

And Michael Sallah, Robert O’Harrow Jr., Steven Rich of the Washington Post: “There have been 61,998 cash seizures made on highways and elsewhere since 9/11 without search warrants or indictments through the Equitable Sharing Program, totaling more than $2.5 billion.”

If either wanted to get these numbers at the state and local levels it would be impossible.

[2] I understand why one want to put an empirical point on it, and the law needs to be changed no matter what, but the core empirical work relating payouts to equitable sharing isn’t as aggressive as you’d imagine. Most of the critical results aren’t significant at a 5% level, and even then you are talking about a 25% increase in just equitable sharing (as opposed to the overall amount forfeited by locals, which we can’t measure) relative to 100% change in state law payouts.

Which makes sense - no prosecutor is going to be fired for bringing in too much money into the school district, if only because money is fungible on the back end.

Follow or contact the Rortybomb blog:
 
  

 

(Wonkish, as they say.)

I wrote a piece in the aftermath of the Michael Brown shooting and subsequent protests in Ferguson noting that the police violence, rather than a federalized, militarized affair, should be understood as locally driven from the bottom-up. Others made similar points, including Jonathan Chait (“Why the Worst Governments in America Are Local Governments”) and Franklin Foer (“The Greatest Threat to Our Liberty Is Local Governments Run Amok”). Both are smart pieces.

The Foer piece came into a backlash on a technical point that I want to dig into, in part because I think it is illuminating and helps proves his point. Foer argued that “If there’s a signature policy of this age of unimpeded state and local government, it’s civil-asset forfeiture.” Civil-asset forfeiture is where prosecutors press charges against property for being illicit, a legal tool that is prone to abuse. (I’m going to assume you know the basics. This Sarah Stillman piece is fantastic if you don’t, or even if you do.)

Two libertarian critics jumped at that line. Jonathan Blanks of the Cato Institute wrote “the rise of civil asset forfeiture is a direct result of federal involvement in local policing. In what are known as ‘equitable sharing’ agreements, federal law enforcement split forfeiture proceeds with state and local law authorities.”

Equitable sharing is a system where local prosecutors can choose to send their cases to the federal level and, if successful, up to 80 percent of the forfeited funds go back to local law enforcement. So even in states where the law lets law enforcement keep less than 80 percent of funds to try and prevent corruption (by handing the money to, say, roads or schools), “federal equitable sharing rules mandate those proceeds go directly to the law enforcement agencies, circumventing state laws to prevent “‘policing for profit.’”

Lucy Steigerwald at Vice addresses all three posts, and make a similar point about Foer. “Foer mentions the importance of civil asset forfeiture while skirting around the fact that forfeiture laws incentivize making drug cases into federal ones, so as to get around states with higher burdens of proof for taking property...Include a DEA agent in your drug bust—making it a federal case—and suddenly you get up to 80 percent of the profits from the seized cash or goods. In short, it’s a hell of a lot easier for local police to steal your shit thanks to federal law.”

Equitable sharing, like all law in this realm, needs to be gutted yesterday, and I’m sure there’s major agreement on across-the-board reforms. But I think there’s three serious problems with viewing federal equitable sharing as the main driver of state and local forfeitures.

Legibility, Abuse, Innovation

The first is that we are talking about equitable sharing in part because it’s only part of the law that we are capable of measuring. There’s a reason that virtually every story about civil asset forfeiture highlights equitable sharing [1]. It’s because it’s one of the few places where there are good statistics on how civil asset forfeiture is carried out.

As the Institute for Justice found when they tried to create a summary of the extent of the use of civil asset forfeiture, only 29 states have a requirement to record the use of civil asset forfeiture at all. But most are under no obligation to share that information, much less make it accessible. It took two years of FOIA requests, and even then 8 of those 29 states didn’t bother responding, and two provided unusable data. There's problematic double-counting and other problems with the data that is available. As they concluded, “Thus, in most states, we know very little about the use of asset forfeiture” at the county and state level.

We do know about it at the federal level however. You can look up the annual reports of the federal Department of Justice’s Assets Forfeiture Fund (AFF) and the Treasury Forfeiture Fund (TFF) of the U.S. Department of the Treasury. There you can see the expansion of the program over time.

You simply can’t do this in any way at the county or state levels. You can’t see statistics to see if equitable sharing is a majority of forfeiture cases - though, importantly, equitable sharing was the minority of funds in the few states the Institute for Justice were able to measure, and local forfeitures were growing rapidly - or the relationship between the two. It’s impossible to analyze the number of forfeiture cases (as opposed to amount seized), which is what you’d want to measure to see the increased aggressiveness in its use on small cases.

This goes to Foer’s point that federal abuses at least receive some daylight, compared to the black boxes of county prosecutor’s offices. This does, in turn, point the flashlight towards the Feds, and gives the overall procedure a Federal focus. But this is a function of how well locals have fought off accountability.

The second point is that the states already have laws that are more aggressive than the Fed’s. A simple graph will suffice (source). The Feds return 80 percent of forfeited assets to law enforcement. What do the states return?

Only 15 states have laws that that are below the Fed’s return threshold. Far, far more states already have a more expansive “policing for profit” regime set in at the state level than what is available at the Federal level. It makes sense that for those 15 states equitable sharing changes the incentives [2], of course, and the logic extends to the necessary criterion to make a seizure. But the states, driven no doubt by police, prosecutors and tough-on-crime lawmakers, have written very aggressive laws in this manner. They don't need the Feds to police for profit; if anything they'd get in the way.

The third is that the innovative expansion of civil asset forfeiture is driven at the local level just as much as the federal level. This is the case if only because equitable sharing can only go into effect if there’s a federal crime being committed. So aggressive forfeiture of cars of drunk drivers or those who hire sex workers (even if it your wife’s car) is a local innovation, because there’s no federal law to advance them.

There’s a lot of overlap for reform across the political spectrum here, but seeing the states as merely the pawns of the federal government when it comes to forfeiture abuse is problematic. Ironically, we see this precisely because we can’t see what the states are doing, but the hints we do know point to awful abuses, driven by the profit motive from the bottom-up.

[1]  To take two prominent, excellent recent examples. Stillman at the New Yorker: “through a program called Equitable Sharing…At the Justice Department, proceeds from forfeiture soared from twenty-seven million dollars in 1985 to five hundred and fifty-six million in 1993.”

And Michael Sallah, Robert O’Harrow Jr., Steven Rich of the Washington Post: “There have been 61,998 cash seizures made on highways and elsewhere since 9/11 without search warrants or indictments through the Equitable Sharing Program, totaling more than $2.5 billion.”

If either wanted to get these numbers at the state and local levels it would be impossible.

[2] I understand why one want to put an empirical point on it, and the law needs to be changed no matter what, but the core empirical work relating payouts to equitable sharing isn’t as aggressive as you’d imagine. Most of the critical results aren’t significant at a 5% level, and even then you are talking about a 25% increase in just equitable sharing (as opposed to the overall amount forfeited by locals, which we can’t measure) relative to 100% change in state law payouts.

Which makes sense - no prosecutor is going to be fired for bringing in too much money into the school district, if only because money is fungible on the back end.

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Daily Digest - September 12: Students Shouldn't Go Hungry on College Campuses

Sep 12, 2014Rachel Goldfarb

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

How One Student is Fighting the College Hunger Crisis (MSNBC)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

How One Student is Fighting the College Hunger Crisis (MSNBC)

Ned Resnikoff profiles Yvonne Montoya, President of the Santa Monica College chapter of the Roosevelt Institute | Campus Network, and her work to get food stamps accepted on campus.

A Tour of the Roosevelt Family's New York (WSJ)

Sophia Hollander speaks with Roosevelt Institute Senior Fellow David Woolner about the Roosevelt legacy in New York through fourteen sites across the state, in light of the upcoming Ken Burns documentary The Roosevelts.

Measuring the Impact of States’ Obamacare Decisions (WaPo)

Jason Millman looks at a new study on how costs varied for people buying insurance based on their states' approach to the Affordable Care Act. States with successful exchanges had the lowest costs.

Why Co-ops Are the Future of the American Economy (AJAM)

Worker-owned businesses should appeal to liberals and conservatives alike, writes Matthew Harwood, because conservatives see ownership as building self-sufficiency and liberals appreciate the higher wages.

The Inflation Cult (NYT)

The investors and economists who continue to insist that runaway inflation is coming to destroy the U.S. economy are a sign of just how polarized our society has become, writes Paul Krugman.

Allentown Bets Big to Shed its Former Image (Marketplace)

Tommy Andres looks at how tax incentives structured through a Neighborhood Improvement Zone have begun to revitalize Allentown's downtown.

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Daily Digest - September 11: Funding Universal Preschool Means Taking Banks to Task

Sep 11, 2014Rachel Goldfarb

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Bright Future Chicago Pushes for Universal Preschool (Chicago Tonight)

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Bright Future Chicago Pushes for Universal Preschool (Chicago Tonight)

Roosevelt Institute Fellow Saqib Bhatti explains one way that universal preschool could be funded: Chicago could pursue legal claims against banks for bad interest rate swap deals.

Jerry Brown Signs Bill Requiring Employers to Give Paid Sick Leave (The Sacramento Bee)

California is the second state to enact state-wide paid sick leave, but David Siders reports that labor groups aren't in full support of the new law because it excludes home health care workers.

Asset Limits Are a Barrier to Economic Security and Mobility (CAP)

Rebecca Vallas and Joe Valenti explain how asset limits on social safety net programs prevent low-income families from building necessary economic stability, and lay out a plan for reform.

The Federal Reserve's Too Cozy Relations With Banks (WSJ)

Stephen Haber and Ross Levine suggest ways to limit banks' influence with the Federal Reserve, including requiring ex-Fed officials to agree to a waiting period before taking jobs in financial services.

Student Debt Collections Are Leaving the Elderly in Poverty (Bloomberg Businessweek)

Federal student debt among the elderly has increased sixfold since 2005, and a law meant to keep garnishments from putting retirees in poverty is in dire need of an update, reports Natalie Kitroeff.

Who Needs a Smoke-Filled Room? (NYT)

Thomas Edsall lays out an example of the complicated structures that allow tax-exempt "social welfare" organizations to spend millions of dollars on political campaigns with little accountability.

These Charts Are Good News if Your Employer Pays for Health Insurance (TNR)

Jonathan Cohn says that the slowed premium increases for employer-sponsored insurance this year are another sign that the Affordable Care Act is keeping health care costs down.

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Daily Digest - September 10: Could a Left-Wing Tea Party Unite Progressives?

Sep 10, 2014Rachel Goldfarb

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Why We Need a Left Wing Tea Party (The Daily Beast)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Why We Need a Left Wing Tea Party (The Daily Beast)

Sally Kohn calls on progressive factions to follow the Tea Party's lead and throw all their weight behind uncompromising candidates who are strong on every progressive issue.

Labor Market Unchanged According to July Job Openings Data (EPI)

Comparing job openings data to unemployment, Elise Gould points out that over half of the unemployed were not going to find work in July no matter what they did, because the jobs don't exist.

Government Debt Isn't the Problem—Private Debt Is (The Atlantic)

Richard Vague writes that financial crises can be tied to too-high and rapidly growing private debt, which means policy solutions need to focus on debt relief for low- and middle-income people.

Were Fast-Food Workers Paid to Strike and Protest? (The Guardian)

The answer is no, writes Jana Kasperkevic. That rumor is a corruption of the union strike fund, a pool set aside to help pay for striking workers' arrest fines and lost wages.

Warren Faults Banking Regulators for Lack of Criminal Prosecutions (WSJ)

While Senator Warren focused on the Federal Reserve, Senator Shelby blamed the DoJ for seeking fines instead of jail time for banking executives, report Ryan Tracy and Victoria McGrane.

Want to Fix the Jobs Crisis? Build a Federally Funded Worker Education Infrastructure (TAP)

Good job training programs – the kind that see both students and employers as clients – can be highly successful, writes Paul Osterman, but they're small and difficult to scale up.

The OECD’s Latest Report is Burdened by Economic Myths (AJAM)

Philip Pilkington says that until economic policymakers stop assuming that economies rebalance themselves and that high government debt is the real problem, good policy change is unlikely.

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Daily Digest - September 9: Block Grants Won't Solve Poverty -- They'll Make It Worse

Sep 9, 2014Rachel Goldfarb

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The Republican Playbook for Cutting Anti-Poverty Programs (The Nation)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

The Republican Playbook for Cutting Anti-Poverty Programs (The Nation)

Roosevelt Institute Fellow Mike Konczal and Bryce Covert write that block grants, like those that make up Paul Ryan's anti-poverty proposal, effectively freeze funding for their programs.

Can Republicans Be Convinced to Help Improve the Affordable Care Act? (TAP)

Looking at Mike Konczal's suggestion for improving the Affordable Care Act, Paul Waldman says that more specific proposals will force Republicans to act.

Democrats Have a Depth Problem. It’s Largely Their Own Fault. (WaPo)

Aaron Blake blames Democrats for not investing in developing young leaders, as the Republicans have done for 25 years, and credits groups like the Campus Network for starting to build that pipeline.

Ferguson Sets Broad Change for City Courts (NYT)

Frances Robles reports on the changes announced at Ferguson's first city council meeting since Mike Brown's death, including a cap on how much of the city's budget can come from court fines.

Dignity (New Yorker)

William Finnegan profiles one McDonalds employee on her work and her labor activism as she struggles to support her kids on $8.35 an hour, her wage after eight years on the job.

This Is What It's Like To Sit Through An Anti-Union Meeting At Work (HuffPo)

Dave Jamieson reports on recordings published by the Teamsters in which employers claim over and over that unions just want employees' money, not to improve the workplace.

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Daily Digest - September 8: What Ever Happened to the Public Option?

Sep 8, 2014Rachel Goldfarb

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To Improve ‘Obamacare,’ Reconsider the Original House Bill (AJAM)

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To Improve ‘Obamacare,’ Reconsider the Original House Bill (AJAM)

Roosevelt Institute Fellow Mike Konczal argues that the House's public option for health care reform, which was missing from the Senate bill that became law, would greatly strengthen the Affordable Care Act.

SEC Faces Renewed Pressure to Consider a Corporate Disclosure Rule (The Nation)

One million comments submitted to the Securities and Exchange Commission have called for requiring companies to disclose political donations to shareholders, writes Zoë Carpenter.

  • Roosevelt Take: Roosevelt Institute Fellow Susan Holmberg finds that corporate political spending disclosure has substantial benefits.

Why the Worst Governments in America Are Local Governments (NY Mag)

Jonathan Chait looks at the problem of "Big Small Government," meaning local governments that act as oppressive forces. He says neither Democrats nor Republicans offer useful solutions.

Paid Sick Leave is Healthy for Business (SFGate)

Carl Guardino, a Silicon Valley CEO, explains the business advantages of instituting paid sick leave in California. He focuses on improvements to health, safety, and economic security.

Some Retail Workers Find Better Deals With Unions (NYT)

The retail union in New York City has secured protections for its members that other retail workers are fighting for, like plenty of advance notice on schedules, says Rachel Swarns.

Unemployment Rate Continues To Be Elevated Across the Board (Working Economics)

The combination of declining real wages and elevated unemployment rates for college graduates indicates the impossibility of a skills mismatch in today's labor market, writes Elise Gould.

Nearly a Quarter of Fortune 500 Companies Still Offer Pensions to New Hires (WaPo)

Since companies are scaling back the generosity of these pensions through hybrid plans that cost workers more, Jonnelle Marte says that number sounds deceptively good.

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New Piece on Where the ACA Should Go Next

Sep 5, 2014Mike Konczal

In light of the increasingly good news about the launch of the Affordable Care Act, I wanted to write about what experts think should be next on the health care front. Particularly with the implosion of the right-wing argument that there would be something like a death spiral, I wanted to flesh out what the left's critique would be at this point. Several people pointed me in the direction of the original bill that passed the House, the one that was abandoned after Scott Brown's upset victory in early 2010 in favor of passing the Senate bill, as a way forward.

Here's the piece. Hope you check it out.

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In light of the increasingly good news about the launch of the Affordable Care Act, I wanted to write about what experts think should be next on the health care front. Particularly with the implosion of the right-wing argument that there would be something like a death spiral, I wanted to flesh out what the left's critique would be at this point. Several people pointed me in the direction of the original bill that passed the House, the one that was abandoned after Scott Brown's upset victory in early 2010 in favor of passing the Senate bill, as a way forward.

Here's the piece. Hope you check it out.

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Daily Digest - September 5: What Can Obama Learn from the Roosevelts?

Sep 5, 2014Rachel Goldfarb

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Roosevelts to the Rescue (NYT)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Roosevelts to the Rescue (NYT)

In light of Ken Burns' upcoming documentary The Roosevelts: An Intimate History, Timothy Egan considers what President Obama could learn from the Roosevelts' lives and political challenges.

Cities Will Lead the Nation’s Technological Advances (FedScoop)

John Breeden II speaks with Roosevelt Institute Fellow Susan Crawford about her new book, The Responsive City, co-authored with Stephen Goldsmith.

Fast Food Strikes Hit 150 US Cities (MSNBC)

The strikes expanded to include acts of civil disobedience, such as sit-ins outside restaurants, that led to arrests in five cities across the country, report Ned Resnikoff and Michele Richinick.

Economic Inequality Continued To Rise In The U.S. After The Great Recession (FiveThirtyEight)

Ben Casselman and Andrew Flowers present their initial takeaways from the Federal Reserve's triennial Survey of Consumer Finances, which confirms that the recovery was only for the wealthy.

Do Fast-Food Strikes Actually Work? (The Guardian)

Heidi Moore says that the labor movement is seeing greater support as fast food strikes grow and incorporate other low-wage workers seeking a living wage and a union.

What to Watch on Jobs Day: It’s No Longer a Jobless Recovery but It’s Undoubtedly a Wage-Growth-Less Recovery (Working Economics)

Josh Bivens and Elise Gould explain why wage growth has been so very slow in the recovery, and how lack of wage growth impacts other aspects of economic growth.

New on Next New Deal

Taxes Are Never Just a Class Issue

Roosevelt Institute | Campus Network National Director Joelle Gamble argues that tax reform isn't the end-all solution to economic inequality, because it can't fix racial inequality.

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Taxes Are Never Just a Class Issue

Sep 4, 2014Joelle Gamble

Tax reforms can't solve all economic inequality, because they won't change the reality of race in the U.S. economy.

Tax reforms can't solve all economic inequality, because they won't change the reality of race in the U.S. economy.

The threat of corporate inversions to the American tax base sprung an interesting political dialogue around tax reform in the United States. We’ve seen debates on how to stop the spread of inversions and arguments that they aren’t a problem at all. Some call for the abolition of the corporate tax rate as a whole and others completely reject such suggestions. I find these discussions of tax reform and its effects on the economy informative yet simultaneously slightly disappointing.

What bothers me about how tax reform debates shake out is how absent they can become of socio-political realities, particularly the reality of race.

One line of progressive argumentation follows simply: If everyone pays their fair share of taxes, we can support public spending and job growth, and we’ll all do better. The argument firmly stands, but there is an important caveat.

It’s easy to harken back to the 1950s when tax rates were high, social services were relatively steady and economic security stretched across economic strata. But who was really secure then? Even the high points of job security for the American economy still left African Americans (and other racially marginalized groups) behind. This a structural phenomenon, instituted by socially racist institutions and a deep history of systemically harming the Black community.

We can’t take race out of conversations around economic inequality. The reality of race is that even fixes to the broader federal revenue landscape don’t always address the structural barriers of racism. A rising tide can’t lift all boats, if some boats are bolted to the seafloor.

Black unemployment consistently exceeds that of whites, both post-Recession and since such data has been available. Gaps between white unemployment and black unemployment shrank in 2009. This was not due to falling black unemployment but instead due to skyrocketing white unemployment.

This racial gap in economic success extends beyond the employment rate. In fact, it is deeply entrenched in the way wealth is distributed in the U.S. The gap between median Black wealth and median white wealth stands at about $236,000 dollars. Flagrant discrimination, in part, contributes to this gap. But it is perpetuated by generations of asset accumulation policies that are targeted at those who already own assets.

Corporate tax reform alone isn’t sufficient to fix the effects of decades of second-class status conferred on African Americans. The government does not just need sufficient funding to create equality within the economy. Distribution of these dollars is equally important. It needs to reflect the nuances of structural inequalities built into multiple aspects of our tax code.

Take federal housing spending policies as a prime example. Ending ineffective tax incentives, such as the mortgage interest reduction, can start to tilt the scales toward those who are not already wealthy. Seventy-seven percent of the benefits of the mortgage interest reduction accrued to homeowners with gross incomes of above $100,000. We need to rethink housing subsidies so that the benefits of federal programs do not heavily favor those who already own homes.

We need corporate tax reform to ensure that all participants in our economy are paying their fair share. But we also need a federal benefits structure that ensures that the concept of a "fair share" considers our history of discrimination when determining which Americans need those benefits most.

Joelle Gamble is the National Director of the Roosevelt Institute | Campus Network.

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Daily Digest - September 4: On Corporate Boards, Local Stakeholders Protect Local Interests

Sep 4, 2014Rachel Goldfarb

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Fighting Corporate Inversion at the City Level (Next City)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Fighting Corporate Inversion at the City Level (Next City)

Roosevelt Institute | Campus Network National Director Joelle Gamble argues for linking tax exemptions to local stakeholder governance on corporate boards to increase corporations' ties to their communities.

Guards Need Job Security of Their Own, Say Apple Store Protesters (In These Times)

Julia Carrie Wong reports on a union protest last week that aimed to garner public attention around Apple's use of subcontracted security guards who receive low wages and few, if any, benefits.

The Education Department’s Problematic Billion-Dollar Partnership With Debt Collection Agencies (Buzzfeed)

The structure of the Education Department's contracts with debt collectors encourages abuse by paying less for services like income-based repayment plans, writes Molly Hensley-Clancy.

The Huge, Regressive Tax Break Right Under Your Roof (TNR)

Danny Vinik looks at a new study on the costs of homeowner tax deductions, which he says subsidize bigger houses and more debt instead of encouraging lower- and middle-income home ownership.

Three Ways That Politicians are Storing Up Disaster for Pensioners (AJAM)

David Cay Johnston explains smoothing, spiking, and starving, three strategies that ensure pensions will be underfunded and create disaster for retirees and taxpayers alike.

The Class War in American Politics is Over. The Rich Won. (Vox)

Nick Carnes, using examples from his book White Collar Government, explains how the wealthiest Americans' control of the political system impacts policy outcomes.

Unemployment Trickles Down to Poorer Workers, Study Finds (WSJ)

When higher-skilled workers take low-skill jobs, the trickle-down effects exasperate inequality, reports Pedro da Costa, according to new research from economists in Barcelona.

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