Critical tax theory is a small body of scholarship animated by the idea that even the tax code is not immune from bias and structural discrimination. A segment of this scholarship has analyzed the ways in which the Internal Revenue Code has perpetuated or worsened racial equity through a “myth of neutrality” that views tax policy as an economic matter without regard to any underlying social inequality. Critical tax theory is, in essence, a combination of two ideas: the idea that more than just financial conditions matter in taxation because tax policies reflect society’s values and the idea that those reflections imbue “explicit and implicit bias in the tax code.” This work, together with detailed literature documenting the numerous inequalities on account of race—across class, income, wealth, homeownership, and on—as well as the national history of discriminating through tax, accounts well for these inequities, mostly at the national and federal level.

This Note looks at South Carolina. In Section II.A, it analyzes inequality throughout the state’s history, beginning with the constitution of 1895 where delegates to the state convention deliberately and knowingly used taxes and tax-based policies to discriminately disenfranchise Black voters. Section II.B examines the taxation and funding questions that arose just prior to public school desegregation as the state purposefully adopted policies placing larger burdens on Black citizens. At both of these times, state leaders abused demographic differences between racial groups and adopted racist policies to disproportionately disadvantage Black South Carolinians. Instead of inspecting the rationale behind a given policy, Section II.C evaluates several of the state’s current policies to explain why they generate benefits that disproportionately accrue to White people and burdens that disproportionately fall on Black people.

Part III is a proposal: The Racism Analysis Act. Modeled after a federal environmental law, the Act would mandate policy makers be informed about the possible racially disparate impacts of proposed tax policies, as well as potential alternatives and methods to mitigate those inequities. Part III also explains why tax policy is particularly well-suited to this type of review and then uses three provisions currently in South Carolina’s tax code to imagine how the proposal might be used.