While the tax code is progressive overall, loopholes and decades of unfair tax cuts have allowed the rich to get richer and left everyone else—especially women and people of color—behind. But it doesn’t have to be this way: we can fix the tax code so the wealthy pay their fair share. For example, we could institute a wealth tax, change the way capital gains are taxed, and strengthen the estate tax. These proposals need to be carefully designed and coordinated. Better taxing wealth would reduce racial and gender wealth gaps, advance racial and gender equity, and raise revenues to invest in our shared priorities.
These proposals are estimated to raise billions of dollars over a 10-year period.[i] The revenues raised from these tax policies should be invested in priorities that would advance gender and racial justice, help ensure the health, safety, and well-being of women and families, and make the economy work for women. For example:
Child Care: Investing $700 billion in child care over 10 years would help make sure that children between the ages of 0 and 13 can access high-quality care, child care providers are paid a living wage, and no family pays more than 7 percent of their income for child care.[ii]
Expanded Child Tax Credit: The American Rescue Plan expanded the Child Tax Credit from $2,000 per child to $3,000 per child for children ages six through 17, and $3,600 per child for children under six. It also makes the credit fully refundable. Extending the CTC expansions for one year and making the CTC fully refundable permanently would cost $185 billion over 10 years.[iii]
Home– and Community-Based Services: Investing $400 billion in HCBS over 10 years would create millions of new jobs, raise wages and improve working conditions for home-care workers, expand services and shorten waiting lists, and advance racial equity.[iv]
Universal Paid Family and Medical Leave: An investment of at least $650 billion over 10 years would establish a national, comprehensive paid family and medical leave program that will guarantee twelve weeks of paid parental, caregiving, and personal medical leave and will replace at least two-thirds of worker’s average wages up to $4,000 a month.[v]
Fair Housing: A $290 billion investment in housing affordability would expand access to accessible and affordable housing and help close the racial wealth gap through the first-ever national investments in homeownership for first-time, first-generation homebuyers. This investment includes $100 for down payment assistance,[vi] $75 billion for rental assistance,[vii] $70 billion funding for public housing to maintain existing units, and $45 billion for the National Housing Trust Fund.[viii]
Health Care: Investing $57 billion over 10 years would provide health coverage to 2.2 million people, who are disproportionately people of color, living in states that have declined to expand Medicaid. This investment must not be viewed in isolation, but rather as building towards high-quality health care for all, where cost is not a barrier to coverage or care.[ix]
Baby Bonds: Investing money in savings accounts for children from low-income families would combat wealth inequality to benefit those who have historically been left out of wealth-building opportunities like homeownership and higher education. One proposal for “baby bonds” would cost $650 billion over 10 years and would generate economic opportunities and support the financial security of the most marginalized.[x]
Nutrition Assistance: Investing $35 billion in crucial nutrition programs over 10 years would provide nearly 9 million more children with access to healthy meals at school and would expand children’s access to good nutrition during the summer.[xi]
Free Community College: Investing $45.5 billion to eliminate the cost of tuition and fees for students at community colleges in participating states and at eligible Tribal Colleges and Universities (TCUs) in the next five years, would benefit students of color and low-income students in particular.[xii]
Continued Support for Historically Black Colleges and Universities: Providing $10 in grants to Historically Black Colleges and Universities (HBCUs), Tribal Colleges and Universities (TCUs), and minority-serving institutions (MSIs) through 2030 would strengthen their academic, administrative, and fiscal capabilities and create new competitive research and development programs.[xiii]
[i] Instituting a wealth tax could raise an estimated $1.9 trillion over ten years. Lily Batchelder and David Kamin, “Taxing the Rich: Issues and Options” (September 11, 2019), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3452274, 13. Changing the way capital gains are taxed could raise $361 billion over ten years. Treasury Department, “General Explanations of the Administration’s Fiscal Year 2023 Revenue Proposals” (March 2022), https://home.treasury.gov/system/files/131/General-Explanations-FY2023.pdf, 111. Strengthening the estate tax could raise $220 billion over ten years. Tax Policy Center, “An Updated Analysis of Former Vice President Biden’s tax Proposal” (November 6, 2020), https://www.taxpolicycenter.org/sites/default/files/publication/160472/an_updated_analysis_of_former_vice_president_bidens_tax_proposals_11-6-20_correction_1.pdf. For more information on these policies in general, see our report on taxing wealth. Amy Matsui, Kathryn Menefee, and Amy Royce, “Advancing Gender and Racial Equity by Taxing Wealth” (April 2020), https://nwlc.org/resource/advancing-gender-and-racial-equity-by-taxing-wealth/.
[ii] National Women’s Law Center, “Building a Comprehensive Child Care and Early Learning System: The Case for a $700 Billion Investment in Child Care Over the Next 10 Years” (April 2021), https://nwlc.org/wp-content/uploads/2021/04/700B-Justification-fact-sheet.pdf.
[iii] Joint Committee on Taxation, “Estimated Budget Effects of the Revenue Provisions of the Title XIII – Committee on Ways and Means of H.R. 5376, The ‘Build Back Better Act’ as Passed by the House of Representatives: Fiscal Years 2022-2031” (November 9, 2021), https://www.jct.gov/publications/2021/jcx-46-21/.
[iv] The White House, “Fact Sheet: The American Jobs Plan” (March 31, 2021), https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-sheet-the-american-jobs-plan/; Special Committee on Aging, Chairman Bob Casey, and Committee on Finance, Chairman Ron Wyden, “A Historic Investment in the Care Economy: Expanding Medicaid Home and Community-Based Services” (May 2021), https://www.aging.senate.gov/imo/media/doc/Final-%20HCBS%20factsheet%20May.pdf.
[v] The Committee on Ways and Means, “Discussion Draft: Building an Economy for Families Act,” https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/BEFSectionXSection.pdf. Investment number estimate on file with the National Women’s Law Center.
[vi] Nikitra Bailey et al., National Fair Housing Alliance, Center for Responsible Lending, “First Generation: Criteria for a Targeted Down Payment Assistance Program” (May 21, 2021), https://nationalfairhousing.org/wp-content/uploads/2021/06/crl-nfha-first-generation-jun21.pdf/, 4.
[vii] Will Fischer and Erik Gartland, Center on Budget and Policy Priorities, “Housing Vouchers in Economic Recovery Bill Would Sharply Cut Homelessness, House Instability” (September 23, 2021), https://www.cbpp.org/research/housing/housing-vouchers-in-economic-recovery-bill-would-sharply-cut-homelessness-housing; Committee on Financial Services, Committee Print, “Subtitle A—Creating, Preserving, and Greening Affordable Housing,” https://financialservices.house.gov/uploadedfiles/hmkp-117-ba00-20210913-sd003.pdf.
[viii] National Women’s Law Center, National Low Income Housing Coalition, “Gender and Racial Justice in Housing” (October 2021), https://nwlc.org/wp-content/uploads/2021/11/GenderRacialJusticeFSNLIHC_updated11-10-1.pdf.
[ix] This number includes $43.8 billion in costs and a loss of revenues of $13.2 billion. Cynthia Cox et al., Kaiser Family Foundation, “Potential Costs and Impact of Health Provisions in the Build Back Better Act, November 23, 2021, https://www.kff.org/health-costs/issue-brief/potential-costs-and-impact-of-health-provisions-in-the-build-back-better-act/ ; Congressional Budget Office, “Estimated Budgetary Effects of Title XIII, Committee on Ways and Means, H.R. 5376, the Build Back Better Act” (November 18, 2021), https://www.cbo.gov/publication/57626.
[x] Corey Booker, “Booker Announces New Bill Aimed at Combating Wealth Inequality,” October 22, 2018, https://www.booker.senate.gov/news/press/booker-announces-new-bill-aimed-at-combating-wealth-inequality; Committee for a Responsible Budget, “Cory Booker’s ‘Baby Bonds’ Plan” December 18, 2019, https://www.crfb.org/blogs/cory-bookers-baby-bonds-plan.
[xi] Chairman Robert C. “Bobby” Scott, House Committee on Education and Labor, “Build Back Better Act Investing in Students, Families, and Workers” (September 2021), https://edlabor.house.gov/imo/media/doc/2021-09-09%20E&L%20BBB%20Mark%20Up%20Fact%20Sheet%202.pdf, 3.
[xii] Chairman Robert C. “Bobby” Scott, House Committee on Education and Labor, “Build Back Better Act: Education and Labor Committee Print: Investing in Students, Families, and Workers” (September 2021), https://edlabor.house.gov/imo/media/doc/2021-09-09%20E&L%20BBB%20Mark%20Up%20Section%20by%20Section.pdf, 2-3.
[xiii] The White House, “Fact Sheet: The Biden-Harris Administration’s Historic Investments and Support for Historically Black Colleges and Universities” (December 17, 2021), https://www.whitehouse.gov/briefing-room/statements-releases/2021/12/17/fact-sheet-the-biden-%E2%81%A0harris-administrations-historic-investments-and-support-for-historically-black-colleges-and-universities/.