Race and the Submerged State Visibility, Tax Policy, and Racial Politics in the United States

Abstract

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.