What the ‘Bush Tax Cuts’ Mean for Communities of Color.

I live in Kingsbridge Heights, a working class residential neighborhood located in the northwest Bronx of New York City. Kingsbridge Heights has a population of 35,000, with a high concentration of Dominicans, especially in the southern and central section of the neighborhood.  In these two areas over 30 percent of the population lives below the poverty line.  But, if you ask any low-income resident New Yorker, Kingsbridge Heights is considered a high-end neighborhood as compared to most low-income communities in New York City.  After all, our high school and college graduation combined rate is 31 percent; our unemployment rate is 12.4%, as compared to 19% in other black/latino neighborhoods; and our murder rate is only three times as high as the national average.  Moreover, none of my neighbors, or most of my neighborhood, have any worries about the Bush-Tax Cuts.

In the last decade, two bills were passed [in 2001 and 2003] which doubled the child earned income credit, reduced estate and capital gains taxes and lowered the tax rates for all Americans in general.  The bills were marketed as bringing equal benefits to all, poor and rich alike: everyone would receive a tax cut, and the tax cuts on the rich would fuel job growth for the poor.

However, these benefits turned out to not be so wide-spread. In fact, Bush tax cut benefits have accrued mostly to the rich. Between 2001 and 2008, of those who received the tax cuts, the richest 20 percent received about 65 percent of the benefits. The top 1 percent alone claimed 38 percent of the benefits.  Even more devastating, is that during the 2001 to 2007 period, just as we were heading to an economic collapse of gigantic proportions – America’s job growth was the slowest on record since World War II, and just one-fifth the pace of the 1990s when Clinton mainly raised taxes.  The Bush tax cuts increased the amount of money that went to the rich, without fueling jobs for the poor.

In 2010, as the Bush-tax cuts were about to expire, the Obama administration planned to extend only parts of the bill that benefited the lower and middle class.  With a growing unemployment rate, not giving tax cuts to households making over $250K a year (Only 2 percent of households) would add $700 billion in government revenue over the next 10 years, which would in turn, improve the economy through social programs, such as unemployment benefits and infrastructure to create jobs.

Unfortunately, in 2010 democrats only had a regular majority and not a super majority of 60 out of 100 senate seats.  Senate republicans were able to block any actions intended by the Obama administration until tax cut benefits were also extended to those making over $250K.  I should mention that these congressional actions also included: Extending unemployment benefits, repealing ‘Don’t Ask, Don’t Tell’, healthcare for 9/11 responders, and a treaty with Russia to reduce the amount of nuclear weapons. As a compromise to allow these actions to pass, Obama extended the tax cuts for all classes until December 2012.

For the poor and low-income, which in many poor neighborhoods across the country significantly means Black and Latino families, changes in the economy have destabilized jobs, resources for schools, and affordable housing.  Jobs for those without a high school diploma have vanished and for high school graduates, jobs are scarce and low paying.

This brings us to what can be done in 2012.

Let’s agree to make 2012 different, and to make it count.  This is a year of responsible citizenship. We can make progress when we share our knowledge and discretionary funds with those who do not know, or lack understanding, about the process or the path to progress.  There is an abundance of creativity and vision, entrepreneurship and ingenuity at solving community problems through philanthropy.

Specific to black and brown communities, and through the recent formation of 21CF powered by Tides, two new Collective Action Funds have been launched to respond to the opportunities and challenges facing Black and Latino communities.  These social change vehicles aim to identify, mobilize and expand the ranks of black and latino leaders; infuse small black/brown-driven organizations with capacity, innovative tools and access to information, and spur research and data analysis to fight racially motivated practices, including disenfranchisement of minority voters and the corrupting influence of “Citizens United” in our political system.  21CF powered by Tides also wants to build a new platform to better serve next generation and emerging philanthropists who want to catalyze and invest in regional and national identity-focused coalitions that positively impact more black/brown communities nationally and abroad.

Tough economic times will increase the amount of vulnerable people in America and around the world.  The working class -who has been living on the fringe- will become the nation’s poor.  Now, more than ever, our progressive donor community and institutional partners need to step up and expand services in disparate communities where the needs are already great.  Tides strong history and solid fiscal management makes us a trusted source for donors to send a collective and powerful message: “America needs social change.”


Photo via Flickr user 401k, used under Creative Commons license.