Pressley, Neal Demand Answers and Action from Treasury on Racial Inequities in COVID-19 Economic Response Implementation and Tax Code Administration

July 31, 2020
Press Release
“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.”

Text of Letter (PDF)

 

WASHINGTON – Today, Congresswoman Ayanna Pressley (MA-07) and House Ways and Means Chairman Richard E. Neal (MA-02) wrote to the Treasury Department expressing 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. 

“[A]t 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,” the lawmakers wrote.

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). 

“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,” Pressley and Neal wrote. “Our concerns are particularly urgent in light of the ongoing pandemic, as minority communities bear the brunt of its devastating effects. 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.

Congresswoman Pressley has led efforts in Congress to pressure the Trump Administration to respond equitably and effectively to the connected public health and economic crises and address existing racial disparities in the United States.

  • In May, she and Senator Kamala D. Harris (D-CA) introduced the Saving Our Street (SOS) Act, legislation that provides targeted relief to microbusinesses—including Black and brown-owned small businesses—during the COVID-19 crisis.
  • In April, Congresswoman Pressley, along with Congressman Gregory Meeks (NY-05) and Senators Harris and Sherrod Brown (D-OH), led their colleagues in writing to the Small Business Administration and Treasury calling on them to ensure minority-owned businesses aren’t shut out of the PPP.
  • In March, Congresswoman Pressley and Senator Elizabeth Warren (D-MA) urged HHS to collect racial and ethnic demographic data on testing and treatment for COVID-19 to identify and address racial disparities.
  • Congresswoman Pressley and Senator Warren also sent a letter to the Centers for Medicare and Medicaid Services (CMS) calling on the agency to immediately release racial and ethnic data of Medicare beneficiaries who are tested or hospitalized for COVID-19.
  • Congresswoman Pressley and Senator Warren have introduced bicameral legislation to require the federal government to collect and publicly report coronavirus demographic data--including race and ethnicity—in order to guide COVID-19 response efforts and ensure those communities most impacted by the virus receive much needed relief.
  • In July, Congresswoman Pressley and Senator Warren wrote to the Department of Health and Human Services (HHS) asking for HHS's report on the administration's efforts to address racial disparities in health care access and outcomes, as required by the Patient Protection and Affordable Care Act (ACA).

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