Congress should:

• Create a federal working group or commission­ to propose a wholesale overhaul of tax policy to increase racial and economic equity through a participatory process;
• Develop and pass omnibus tax reform legislation in accordance with racial and economic equity goals;
• Raise corporate income taxes and end tax deferral for multinational corporations’ foreign income. Corporate tax rate should be returned to 35% in the near term, with a phase-in process for returning to the corporate tax rate for large corporations to 1968 levels or 50%. 
• Institute a lobbying tax on companies that spend over $500,000 on lobbying, starting at 35% of total lobbying expenditures and graduating to 75% for firms that spend over $5 million.  
• Raise marginal tax rates for high income earners – specifically the top 1% of income earners –  to 50% and then gradually up to 80% to 90%. 
• Remove income caps on payroll taxes.
• Eliminate tax breaks and impose an excise tax on gun manufacturers, oil and gas companies, and other corporations engaged in harmful activities.
• Allow all families to file taxes together if they’re a financial unit, regardless of how they are legally related, and allow all parents to claim their children as dependents and qualify for child-related tax credits, even if they are not legally recognized as “parents.
• Make permanent and expanding the American Rescue Plan Act’s expansion of the Child and Dependent Care Tax Credit and the Earned Income Tax Credit (EITC) for low income workers not raising children, including non-custodial parents and childless adults, to reach every child on a monthly basis without regard to their immigration status, thereby reducing taxes owed by low-income earners. In addition, jurisdictions should work toward providing universal quality, accessible, and free childcare, dependent care, and care for disabled people.
• Make the federal tax code more progressive by: 
  • Imposing a wealth tax of 2% on every dollar on households earning above $50 million and 3% on every household earning above $1 billion; 
  • Assessing a 10-percentage-point surtax on adjusted gross income (AGI) in excess of $1 million for single filers and $2 million for joint filers. This surtax would apply to both income from work and income from wealth.
  • Taxing capital gains as income and applying the capital gains tax on both realized and unrealized gains;
  • Creating a tax on property transfers such as a taxable penalty on the full value of the property at original purchase or sale, whichever is higher, for non-owner occupied properties which change hands in less than 5 years. 
  • Assessing and eliminating tax exemptions such as mortgage reduction for homes sold above a specified price threshold, health insurance exemption, investment-­based retirement accounts, etc., and instead support wealth-­building by households who don’t yet hold such assets. 
  • Increasing estate tax and inheritance taxes, and repeal “stepped up basis” provisions in federal tax law that allow individuals to avoid paying tax on the increase in value of assets over a person’s lifetime when passed on at death; 
  • Imposing a 50% exit tax for individuals with a net worth above $5 million who renounce citizenship or use dual citizenship to escape taxation.
  • Creating a financial transaction tax on trading stocks, bonds, derivatives and currencies, and signing treaties with countries housing major financial centers worldwide to do the same to discourage tax evasion.
  • Closing loopholes, including those in the Net Investment Income tax, an additional tax on high-income households created by the Affordable Care Act, and the passthrough deduction established in the Trump tax law. 
  • Making low­-wage employers pay a penalty or a payroll tax rate proportional to wage disparity. 
  • Creating disincentives to employers contracting work out, including by ending the pass-through deduction.

• Mandate the IRS to focus existing resources on enforcement for high-income taxpayers and corporations and on administering tax credits for families. 
• Direct the IRS to enforce the tax code through civil enforcement mechanisms and repeal criminal provisions of tax codes.
• Direct tax judgments into programs serving low-income people.  

The IRS should:

• Collect and make public race-based tax data. 
• Deprioritize audits of people claiming the Earned Income Tax Credit (EITC) and reduce penalties for violations of EITC-related regulations.
• Build and use capacity to audit high income and large corporations taxpayers primarily responsible for lost tax revenue. The IRS should raise the threshold of earnings defined as “high-income” from the current level of $200,000 (individuals earning this amount tend to be wage-earners) to $400,000 and above. This would ensure that more resources are directed to ensuring compliance of high income earners, rather than lower wage earners.

• Each state should:
  • Create a working group or commission to propose wholesale tax reform consistent with racial & economic equity goals through a participatory process, and create and implement appropriate legislation;
  • Implement progressive income taxes and redistribute the revenue as needed to municipalities; 
  • Lift state income and corporate tax rate caps and eliminate corporate subsidies and giveaways on property taxes;
  • Impose a “Real Estate Transfer Tax” (RETT), a tax levied at the point of sale of a property. Broadly utilized in states and municipalities, when progressively structured, RETTs generate significant revenue, particularly for higher value buildings.
  • Implement tax ­base sharing (in which all of the municipalities in a given metropolitan area agree to share the tax proceeds from new development) to reduce inequality and prevent a race-to-the-bottom approach to local and regional economic development;
  • Eliminate all corporate loopholes at state level, including single sales factor (which provides for taxation of corporate earnings in that state only, as opposed to the three factor approach, which taxes corporations based on their payroll, property and sales within the state);
  • Reduce sales and gross receipts taxes and shift toward luxury taxes and taxes on extractive and polluting industries;
  • Enact and expand Earned Income Tax Credits;
  • Enact and expand child and dependent care tax credits; 
  • Collect and make public race-based tax data.

Local Action

Local jurisdictions should:

• Ensure that property taxes and other local taxes are income sensitized; 
• Decouple school funding from property taxes and impose a school funding system that is equitable in every jurisdiction;
• Impose a “Real Estate Transfer Tax” (RETT), a tax levied at the point of sale of a property. Broadly utilized in states and municipalities, when progressively structured, RETTs generate significant revenue, particularly for higher value buildings.
• Eliminate Tax Increment Financing (TIF), Business Improvement Districts (BID) and Opportunity Zones which allow use of public funds to subsidize economic development and public projects in underdeveloped areas. Many governments have created TIF districts in areas that are not underdeveloped or under resourced, and have also given public funds to private developers that would otherwise have sufficient capital for a development project. TIF abuse has led to calls to abolish TIF so that TIF dollars can go back into the general taxing bodies with the understanding that they can be used for things that benefit all residents; 
• Implement progressive municipal income taxes that tax higher income earners at higher rates;
• Apply conservation pricing on utilities so lower-­income households pay a lower rate and bulk or excessive users — such as commercial and industry — pay higher rates;
• Charge different rates of property tax for residential, second home, and commercial and industrial properties with higher rates for higher value land, such as a “mansion tax;” 
• Impose an anti­-speculation tax on property transfers;
• Institute “land value capture” or “valuation” policies that leverage land value as a source of revenues for community benefit;
• Provide fixed­ dollar exemptions rather than percentage­-based exemptions and implement “circuit breakers” for property taxpayers below a certain income level. A percentage-based exemption provides the same percentage reduction in taxes for homeowners across the board therefore, it favors owners with higher-valued homes. 

Lower income households tend to have lower valued homes. A fixed or flat-dollar property tax exemption is a progressive structure because it reduces the property tax for homeowners but the percentage is a larger share of the home value for owners with lower-valued homes. Therefore, they see a higher reduction.  

• Typically, large tax exempt institutions (e.g. hospitals, private universities, churches, museums, etc) forge Payment in Lieu of Taxes (PILOT) agreements with governments. PILOT agreements are agreements to make payments to compensate governments for some or all of the property tax revenue lost due to tax exempt ownership or use of real property. In other words, PILOT agreements help governments offset losses of revenue that could otherwise have been collected via property taxes.  Mandate that large tax exempt institutions enter into Payment in Lieu of Taxes (PILOT) agreements in order to generate more revenue that can be used to benefit residents.