As we begin a new year with a new Administration and Congress, we feel optimistic about the chance to advance bold, comprehensive solutions to some of today’s toughest challenges, including historic racial and ethnic economic inequity. The Biden Administration has shown itself to be an honest broker in supporting the Build Back Better priorities it established during the campaign, including the Executive Order President Biden signed last week to advance racial equity.

Historically, systemic racism and discrimination have been embedded into policies and institutions, deeply shaping outcomes in work and wealth. These factors have determined, in no small part, how economic benefits are distributed, resulting in racial and economic inequality and racial wealth disparities. This includes policies like Jim Crow laws and the New Deal and G.I. Bill, which either codified discriminatory provisions or ignored rampant systemic racism, which would deny African Americans access to many of the benefits, including free education, unemployment insurance, Social Security and low-cost mortgage loans. Most recent data show that Black and Latinx households now own just 13 cents and 20 cents of wealth, respectively, for every dollar of wealth owned by White households. What’s more, the health and financial crises caused by the COVID-19 pandemic are compounding to devastating effect in communities of color and other vulnerable populations.

As tireless advocates for closing systemic racial wealth, wage and poverty gaps, Prosperity Now is aligned with policy makers and leaders interested in real solutions that meet the needs of those historically left out of economic success and stability. As such, here are the policy priorities we feel are among the most critical for this Administration to addresses in its first 100 days.

• Supporting minority-owned small businesses. As employers of 47 percent of the workforce and generators of two-thirds of all new jobs, small businesses are essential to a strong economy. Providing increasing funding to Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs)—the main source of capital for many minority and low-income communities—will ensure they have the necessary resources to support their small businesses.
• Housing and homeownership. Owning a home is one of the key drivers for creating wealth. Therefore:
  • A refundable tax credit should be created for cost-burdened renters.
  • A refundable tax credit for first-time homeowners should be created for households at or below 80% of area median income. 
  • All homeowners should receive a flat, post-home purchase tax credit.
• Ensuring every child has a nest egg for the future. Implement national long-term public trust accounts—or ‘baby bonds’—through the American Opportunity Accounts Act.
• Supporting low- and moderate-income working families. Expand the impact, eligibility and refundability of the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC), which—unlike many other individual tax provisions in the federal tax code—targets low- and moderate-income working families.

We know that racial economic equity can significantly improve broader economic health. According to a recent study, addressing the racial wealth gap 20 years ago could have added $16 trillion to the U.S. economy. Not to mention that as of the latest census data release, there were 2.58 million Black-owned businesses in the United States, generating $150 billion in annual revenue and supporting 3.56 million U.S. jobs. By supporting policies, programs and entities that create a pathway for more minorities and low-income populations to achieve financial stability and prosperity, we can ensure they not only have the tools to become or continue to serve as engines of economic growth, but that they are able to participate fully in an economy that has historically and strategically kept them on the margins.

Find out more about Prosperity Now and our 2021 policy priorities here.

All the best,

Gary L. Cunningham
President & CEO