Over the last several decades, policymakers have used tax policy to expand government
social programs. In typical social spending areas such as housing, healthcare, income
security, commerce, and education; the federal government has increasingly used tax credits,
exemptions, deductions, and exclusions as a means of delivering social benefits. These tax
expenditures are a more indirect means of provision than more traditional direct government
outlays for agency implemented programs. Scholars have identified these indirect programs
as making up a “submerged state” that disproportionately serves high income populations.
This paper examines whether there are racial disproportions between indirect and direct
program types. By focusing on programs that appear to have similar goals in the areas of
housing, healthcare, and income security and using a chi-squared test for significance, I find
concentrations of non-whites in direct programs and whites in indirect programs. This finding
has important public opinion, civic engagement, and equity implications and indicates an area of
necessary further study.
Professional paper for the fulfillment of the Master of Public Policy program.
Onyiah, Constance Ify.
Race and the Submerged State Visibility, Tax Policy, and Racial Politics in the United States.
Hubert H. Humphrey School of Public Affairs.
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