Below we answer audience questions that we were unable to address during last Wednesday’s second installment of our Policy and Webinar Series.

The webinar focused on historical policies in relation to taxes, housing, worker protections and corrections that have contributed to racial and ethnic equity issues in our state and nation. Panelists for the webinar were:

  • Mike Leachman of the Center on Budget and Policy Priorities, who discussed historical tax policies such as the implementation of state sales taxes, that have exacerbated inequities;
  • Palma Joy Strand of Creighton University, who discussed redlining in Omaha;
  • Dr. Mark Foxall of the University of Nebraska Omaha, who showed how a combination of several factors contributed to the overrepresentation of racial and ethnic minorities in our corrections system; and
  • Abbie Kretz of the Heartland Workers Center, who discussed how shortcomings in worker protection policies have contributed to many problems including racial and ethnic minorities accounting for a disproportionate percentage of Nebraska’s COVID-19 infections and deaths.

You can watch a recording of the webinar here and below the Q&A section you can access links to other materials featured during the webinar. Also, if you haven’t done so already, you can still register for the remaining webinars in our Policy and Equity Series, which will be held every Wednesday in October at 10 a.m. This week’s webinar will focus on why it is important for the state to address equity issues and will feature a panel discussion with:

  • Scott Moore, Senior Vice President-Corporate Relations and Chief Administrative Officer at Union Pacific, who will discuss the business case for increasing equity;
  • Dr. John Hakonson, Superintendent of Lexington Public Schools, who will provide a K-12 perspective;
  • Garry Clark, President and CEO of the Greater Fremont Development Council, who will discuss the importance of embracing equity in rural communities; and
  • Miguel Estevez, a licensed mental health practitioner and alcohol and drug counselor at the Friendship House in Grand Island, who will provide an on-the ground perspective regarding the need to address equity in health care and particularly mental health care.

You also can read a recap and access video and slides from our first Policy and Equity Webinar here.

Q&A

Is it true that the creation of more jobs are created by tax cuts to the wealthy and corporations? Those jobs benefit all income levels, especially lower income.

Mike Leachman: No, businesses typically add jobs when they see or expect demand for their services or products, not because they got a tax cut, as evidenced by the income tax experiments Kansas and other states have attempted. Studies also have found that lower personal income tax rates aren’t associated with stronger economic growth. In fact, tax cuts for the wealthy and big, profitable corporations can be harmful to growth when wealth and income are already highly concentrated, as they are today. There’s a real opportunity cost to neglecting our schools, roads and bridges, environmental health, health care and other basic needs.

What specific tax policies should we target first to have the largest impact on racial equity?

Mike Leachman: Today’s state and local tax systems in most states, including Nebraska, ask the least of those with the most, which makes race and class inequities worse. Tax policies that move in the other direction would be equity-enhancing. Those with the biggest impact are those that raise significant revenue from people with large amounts of wealth and income, especially if that revenue is invested to reduce significant barriers to opportunity faced by low-income people, especially people of color. That means looking at taxing high amounts of income at higher rates and finding ways to better tax wealth, much of which goes untaxed. This could include higher taxes on expensive homes, capital gains and large inheritances.

What should people take away from the data showing that 10% of whites own 2/3 of all U.S. wealth?

Mike Leachman: That wealth in the U.S. is very concentrated and that extreme wealth concentration intersects with racial discrimination and bias (both historic and ongoing) so that a relatively small number of white people own most of the wealth. Opportunities for people of color to build wealth were sharply limited for a very long time and we haven’t yet built the sorts of communities that would allow us to overcome that history. In some ways, our laws and social customs are reinforcing and extending that history, as with our racially discriminatory systems of criminalization and punishment. If my grandparents for generations were relentlessly beaten down and my father given a pittance, it wouldn’t be fair to blame me for having less wealth than those whose families for generations were given opportunities and advantages.

An analogous situation is that some 82% of inventors today are men, down from 96% in the 1880-1940 period, but still extremely high. Does anyone really think this extreme disparity is the result of men having that much more innate capacity to innovate? In truth, women were effectively barred from being inventors for a long time, until pretty recently, so they couldn’t invent no matter how talented and capable they were. And that history has not yet been overcome in part because our history assures that girls today have few inventor role models (a crucial factor in determining whether someone becomes an inventor) and some of the cultural influences that discourage girls from becoming inventors remain in place. Centuries of history take time to overcome, especially without very deliberate and extensive efforts to build new sorts of social structures and cultural norms.

Given a shift to the service economy, does it have to follow that shifts to sales/service are automatically regressive?

Mike Leachman: In general, a broad expansion of the sales tax to services won’t change relative tax burdens, at least not by much. There’s one circumstance, however, in which such expansion could make a state’s overall tax system somewhat less equitable: if taxing services raises the proportion of total state revenue derived from the sales tax and lowers the proportion derived from more progressive sources like personal and corporate income taxes. This can be avoided by balancing a sales tax base expansion with a reduction in the sales tax rate or an increase in the personal income tax. Targeted credits could also be administered through the income tax or a rebate of sales taxes paid would be used to mitigate the increased burden low-income families could experience by an expansion.

How many other states have Sanitary and Improvement Districts (SIDs)? (SIDs are public entities that give private developers access to municipal bond financing to subsidize infrastructure for developing areas outside the city limits. For more information, please refer to this paper by Palma Joy Strand.)

Palma Joy Strand: I have not done exhaustive research on this, but my impression from various sources is that SIDs as the predominant vehicle for metro development is not widespread.  Even in Nebraska, SIDs with eventual annexation are used primarily in Douglas (Omaha) and Sarpy (Papillion) Counties. The long-time planning director in Lincoln was of the view that SIDs were not a desirable approach, and so development was undertaken differently there.

What do the percentages of homeownership represent on slide 14 of Palma Joy Strand’s presentation?

Palma Joy Strand: The percentages refer to the percentage of a particular racial/ethnic population that are homeowners (not to percentages of the population as a whole). So, 69% of Whites in Omaha are homeowners; 48% of Hispanics; and 35% of Blacks.

To what extent did red-lining get instituted by banks and other home loan providers nationwide and in Omaha thereafter?

Palma Joy Strand: Redlining guided banks and other mortgage providers loan practices in Omaha and across the nation for decades. Maps were developed by the federal Home Owners’ Loan Corporation (HOLC) to determine where the federal government would guarantee loans for home purchases. Banks and mortgage providers invested in homes in areas where the loans were federally guaranteed and disinvested in homes in areas where they were not. White homebuyers built wealth by buying homes in “greenlighted” areas (i.e., those areas the HOLC maps deemed least risky for investment); Black homebuyers were generally prohibited by local laws from purchasing homes in these areas and thus were prohibited from building home equity to nearly the same degree.

What is the most impactful workforce protection policy that could be passed right now to help Nebraska’s frontline workers?

Abbie Kretz: At this point, I would say that giving enough staffing and resources to agencies charged with enforcing worker safety protections. This would include OSHA and asking them to actually inspect the workplaces. This would also include giving more money to the Nebraska Meatpacker Bill of Rights Inspector and decreasing the number of roles this person has. It would also be helpful now to give more teeth to this Bill of Rights. Increasing the levels of sanctions to plants or employers in facilities where workers have gotten sick, been hospitalized or died and providing Paid Family and Medical Leave — particularly at the state level — also would be impactful right now.

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