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Reluctance to Tax Large Companies Rooted in Racism, Professor Says

Posted on Sep. 14, 2022

The reluctance to tax large corporations can be traced to the 1960s and stems from racism, according to a tax law professor.

At a September 13 webinar hosted by the Joint Center for Political and Economic Studies, Steven Dean of Brooklyn Law School said he’s writing a book on why taxing large companies like Amazon, Google, and Apple is so difficult.

Doing so “seems like something that we’re powerless to do or something that we can’t do, but it’s really an affirmative choice that was made in the ’60s to pursue this very neoliberal, low-tax” model, Dean said during the webinar, which focused on improving tax policy for Black communities.

“Essentially, the rich world decided that if we’re going to have to integrate — we’re going to have to integrate our pools, we’re going to have to integrate our tax system — we’d rather nobody collect taxes,” Dean said. That was “not a great thing for anybody,” but it hit Black Americans the hardest, he added.

Dean said the root of the issue can be traced to December 14, 1960, the day the U.N. General Assembly adopted the Declaration on the Granting of Independence to Colonial Countries and People and the day the Convention on the OECD was signed.

That same day, the Marshall Plan was transformed into the OECD to achieve a broader objective to ensure poor countries that were mostly Black were unable to collect taxes, according to Dean.

“They were gaining formal legal sovereignty, but they were being stripped at the same time of their ability to collect revenues,” Dean said.

Most of the countries in sub-Saharan Africa still collect about 15 percent of their GDP in tax revenue, even though the U.N. has said 20 percent is needed to grow sustainably, Dean said.

“It’s so shocking to me that racism . . . can inform something so powerful and so large, and in such a profound way, and no one noticed for decades,” Dean said.

Bradley Hardy of the Brookings Institution said there is a “really disturbing history” of public financing, race, and tax policy. In the Reconstruction era, for example, racial violence against Black politicians was directly linked to their calls to invest more in public resources, he said.

“There has been this tension against investments that could benefit disadvantaged communities — Black communities — and a pretty strong response against it,” Hardy said.

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