Raising Revenue for Good Social Public Policy


COVID-19 and its resultant economic decline have underscored inequities faced by women and people of color. In the United States, policymakers pursued different paths when attempting to recover: Some, like state lawmakers in Georgia, chose to cut funding for programs and services. Other policymakers invested dollars where the need is greatest. Moral investments that put the needs of people first, by creating jobs that pay living wages and help people afford necessities, and equitable policies that ensure everyone pays their fair share of taxes are needed to create a system where everyone can recover and thrive.

Key Words:

revenue, budget, investment, COVID-19, recovery, healthcare, childcare, inequities

Good social public policy must explore the interplay between race, morality, and investment. The COVID-19 pandemic and ensuing recession exacerbated preexisting inequities driven by a legacy of racist policies and practices, but also presents an opportunity to create something better.

At the national level, several federal lawmakers have responded to these crises by intentionally investing dollars where the need is greatest. The American Rescue Plan Act (ARP) laid a foundation to move beyond recovery and build a more equitable future. Federal lawmakers are now debating deeper recovery efforts based on the Biden Administration’s American Jobs and American Families plans. Not only do these plans describe concrete strategies for creating jobs, rebuilding physical infrastructure, improving care infrastructure, and reducing child poverty, but they directly call for investments in children, women, and people of color. These plans are an example of good social policy—targeted investments that benefit everyone by putting more dollars into the economy, helping families afford necessities like healthcare and childcare, and prioritizing the needs of people.

Evolving a State’s Legacy

Georgia provides a case study for how a state’s legacy of slavery, Jim Crow laws, and racist and discriminatory policies led to disparities in health, education, and economic outcomes. Compared to white Georgians, Black Georgians are less likely to have health insurance (Harker, 2000), more likely to attend under-resourced schools (Owens, 2019) and more likely to work in industries that both expose them to COVID-19 and are more vulnerable to layoffs.

Yet, despite these disparities, Georgia’s lawmakers have chosen not to invest in an equitable recovery. While debating the Fiscal Year (FY) 2022 budget, which went into effect July 1, 2021, Georgia’s lawmakers maintained nearly $850 million in cuts from FY 2020 levels, including steep cuts to agencies tasked with supporting Georgia’s public health infrastructure and mental and behavioral healthcare programs (Harker et al., 2021). The state budget is the most important piece of legislation that must be passed each year in Georgia. It also serves as a statement of values.

Georgia’s legacy of slavery, Jim Crow laws, and racist and discriminatory policies led to disparities in health, education, and economic outcomes.

During the budgeting process, lawmakers faced a choice: to uphold the status quo—one of underfunding critical services and programs—or to make a statement that prosperity should be within reach for everyone. Unfortunately, state leaders clung to the status quo, and Georgians throughout the state—especially communities of color—will feel the effects.

The state budget and tax code disproportionately harm people with low incomes and people of color. A history of regressive tax policies at the state and local level worsens these inequities within Georgia by asking those making the lowest incomes to pay the largest share in taxes (Harker et al., 2021). Historic injustices and harmful policy choices have resulted in vast disparities in income across race and ethnicity in Georgia. Lawmakers considered proposals that would help rebalance the tax code so that it more fairly taxes wealthy citizens and corporations, but they ultimately chose to barely mitigate the nearly $10 billion in estimated tax breaks that will be handed out to special interests this year, while ignoring measures that would deliver true economic relief to Georgians affected by the pandemic.

A Rebalanced Tax Code Can Help States Like Georgia

The tax code must also be rebalanced at the federal level. Currently, wealthy people in the United States do not pay taxes each year on a large share of their income, much of which comes from increases in the value of stock, real estate, and other holdings (Eisinger, Ernsthausen, and Kiel, 2021). Provisions in the tax code have widened racial disparities and the racial wealth gap (Davis, Hill, and Wiehe, 2021).

President Biden is asking the wealthiest Americans to pay a fairer share of federal taxes and has proposed permanent revenue measures such as ending a loophole that allows wealthy people to entirely avoid paying income taxes on some assets; scaling back generous tax breaks for the wealthy by taxing wealth more like work for people earning more than $1 million annually; raising the top tax rate for high-income people; helping the IRS catch tax evasion; and raising taxes on corporations while reducing the special tax treatment for offshore profits and investments (Institute on Taxation and Economic Policy [ITEP], 2021).

‘The state budget and tax code disproportionately harm people with low incomes and people of color.’

At the federal level, policymakers also can expand health coverage and improve affordability by closing the Medicaid coverage gap, make the ARP expansions of the Child Tax Credit and Earned Income Tax Credit permanent, increase the availability of childcare and healthcare subsidies, create subsidized jobs to help those facing barriers in the labor market, and strengthen the unemployment insurance system to better meet the needs of working people when they lose their jobs.

This is an opportunity to put people first through investments that are racially equitable, intentional, and moral. In Georgia, lawmakers can tap into the state’s rainy-day fund surplus of $2.1 billion, along with $4.7 billion of federal relief through the ARP that can be used to address the current and longstanding needs of Georgians. These funds provide an opportunity to shift away from budget cuts steeped in racism that more severely harm people of color (Banerjee and Williamson, 2020), to move Georgia forward. The state can use these dollars to restore budget cuts, provide broadband infrastructure to rural communities, and enact a Georgia Work Credit (a state Earned Income Tax Credit, or EITC) that is provided via direct payments to Georgians.

In addition to the rainy-day and federal relief funds, Georgia’s lawmakers can ensure long-term support that can help families prosper—and access the supports they need during next economic crisis—by raising revenues. This would enable the state to create a more equitable and moral budget that is people-centered. Opportunities for raising revenue include:

  • Lifting the tobacco tax to the national average, in order to bring in new revenues and support public health;
  • Ending the “double deduction,” a tax loophole that benefits only Georgia’s top earners;
  • Evaluating special-interest tax breaks and trimming back those that do not deliver on their promise; and
  • Ending the school voucher program that uses public dollars for private schools.

We need good social policy for the recovery and to build a better future, and these changes are possible—it is a matter of political will. Federal and state lawmakers must build a more equitable economy where everyone, regardless of race, ethnicity, class, or immigration status, has access to affordable health coverage and housing; where jobs pay living wages and workers with fewer job prospects have the supports to help them get by and get ahead; where all children can reach their full potential; and where corporations and wealthy Americans pay their fair share of state and federal taxes.

Amanda Hollowell is director of Strategic Campaigns at the Georgia Budget and Policy Institute (GBPI) in Atlanta. Dominique Derbigny Sims, MSW, is senior vice president at GBPI.


Banerjee, A., and Williamson, E. 2020. “Fighting Austerity for Racial and Economic Justice.” CLASP: The Center for Law and Social Policy. Retrieved July 15, 2021.

Davis, C., Hill, M., and Wiehe, M. 2021. “Taxes and Racial Equity: An Overview of State and Local Policy Impacts.” Institute on Taxation and Economic Policy (ITEP). Retrieved July 15, 2021.

Eisinger, J., Ernsthausen, J., and Kiel, P. “The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax.” ProPublica. Retrieved July 28, 2021.

Harker, L. 2020. “Fast Facts on Medicaid Expansion.” Georgia Budget & Policy Institute (GBPI). Retrieved July 15, 2021.

Harker, L., et al. 2021. “2022 Georgia Budget Primer.” GBPI. Retrieved July 15, 2021.

ITEP. 2021. “Resources on President Biden’s Tax Proposals.” Retrieved July 15, 2021.

Owens, S. 2019. “Education in Georgia’s Black Belt: Policy Solutions to Help Overcome a History of Exclusion.” GBPI. Retrieved July 15, 2021.