Legacies of historical racist policies and ongoing discrimination in areas such as education, employment, and housing have barred many Californians of color from economic opportunities. As a result, Californians of color — particularly Black, Latinx, and American Indian Californians — are less likely to have high incomes and to have built enough wealth to be able to weather periods of income loss, retire comfortably, and pass on wealth to their children. These barriers have also made Californians of color more likely to have experienced health and economic consequences of the COVID-19 crisis. One area policymakers should consider in efforts to address these inequities is the state’s tax and revenue policies. Although these policies may appear race-neutral, they can play a significant role in either worsening existing racial and ethnic income and wealth disparities or promoting greater equity for Californians.
California’s corporate taxes raise revenue that helps pay for the public services and infrastructure that enable businesses to exist and to profit in local communities and statewide. Corporations depend on high-quality schools to produce a dedicated and educated workforce and to help attract qualified employees. Corporations, like individuals, also benefit from a range of public services such as those provided by fire departments and the state judicial system that protect corporations’ legal rights. Yet, profitable corporations are contributing less in taxes that support these public services, as a share of their California income, than a generation ago.
On March 12, President Biden signed the American Rescue Plan (ARP) Act to provide much needed assistance to tens of millions of people, including millions of Californians. The $1.9 trillion federal aid package will bring approximately $150 billion in federal aid to California to help reduce economic hardship for low- and middle-income households, support workers, help schools address learning needs, boost early care and learning, combat housing instability and homelessness, and bolster the economy. This latest round of federal fiscal relief will help reduce hardship as a result of the pandemic, particularly for Californians with low incomes and people of color, and begins to set the stage for a more equitable economic recovery. This report outlines key provisions of the plan and what it means for Californians.
Child care is critical for working parents, but the high cost of care can be a challenge for families. A very small share of California families with low and moderate incomes receive care through the state’s subsidized child care and development system. Many of these families pay monthly fees into this system — fees that can be unaffordable for families who are living paycheck to paycheck. Working parents should not have to face impossible choices each month about whether to pay for food, rent, or child care. Learn more about family fees and why policymakers must use state and federal dollars to waive fees, ensure child care providers are supported, and boost families’ economic security.
The COVID-19 pandemic has exposed many Californians and Americans to unprecedented economic instability, but many women in California were already struggling to pay the bills prior to the onset of the economic crisis. According to the California Women’s Well-Being Index, in a five-year period leading up to the COVID-19 pandemic, many women across the state were experiencing economic hardship — and this was happening during the longest period of economic growth on record.