Mitt Romney’s Tax Plan Gets the Math Right and the History Wrong

The American tax code has never been neutral in its effects, particularly when it comes to race.

It is truly something when Congress is being outmaneuvered on tax policy by the founder of one of the nation’s largest private equity firms. Mitt Romney, a former senator from Utah and governor of Massachusetts, deserves credit for confronting a reality many elected officials continue to dodge: the nation’s fiscal trajectory is unsustainable for working people, and it has been for a long time.

In a recent op-ed, Romney put forth common-sense tax policy solutions. That he is now recommending them is proof of how deeply distorted the economy has become after years of policy choices that entrenched tax breaks for the wealthiest Americans. But we have to be clear that the question our tax system should be answering is not simply how to avoid a fiscal cliff; it is how to design a system that better provides for public goods and services and creates the conditions for Americans to thrive.

Photo by Kelly Sikkema on Unsplash

Answering that question honestly requires confronting a truth Romney largely sidesteps: the American tax code has never been neutral in its effects, particularly when it comes to race. Though often described as technical or colorblind, the tax system has long privileged income derived from assets over income earned through work, inheritance over wages, and capital appreciation over labor. Because access to asset ownership in the United States has been shaped by race for generations, these preferences have produced deeply racialized outcomes—even though race is never mentioned in statutory language. Any tax reform that ignores this history risks stabilizing the balance sheet while preserving inequality. That history was shaped by intentional policy decisions to systematically exclude Black people from wealth-building programs. Though the policies varied by state and locality, their outcomes converged: a durable racial wealth gap that the tax code now quietly protects rather than repairs.

These were not marginal effects or unintended consequences. Wealth-building programs—from tax-advantaged homeownership to infrastructure investment and local public finance—were designed and administered in ways that consistently excluded Black people while subsidizing wealth accumulation elsewhere. Redlining restricted where Black families could live, property tax assessments undervalued homes in Black neighborhoods, and public investment followed those distorted valuations rather than corrected them. Credit markets reinforced the same hierarchy, directing capital toward white households and communities deemed “safe” while starving Black neighborhoods of the investment necessary to grow.

This history matters because it helps explain why programs like Social Security have played such an outsized role in economic stability for Black families. For communities systematically denied access to wealth, Social Security has been the difference between aging with dignity and aging in crisis. For Black older adults in particular, its impact is stark: Without Social Security, 49% would live below the poverty line; with benefits, that figure falls to 20.1%. Black working people also benefit disproportionately from Social Security because we experience lower lifetime earnings and higher rates of disability, and because higher rates of premature death mean spouses and children are more likely to rely on survivor benefits. These are not the result of poor personal decisions; they are the predictable outcomes of structural conditions—unequal access to healthcare, hazardous work, wage suppression, and chronic stress—shaped by intentional policy choices made by those in power over generations. Framing Social Security primarily as a fiscal burden rather than a stabilizing starting point of corrective measures obscures both its economic value and its role in mitigating the consequences of long-standing, policy-driven inequity.

This is why Romney’s embrace of means-testing future Social Security benefits is misguided and counterproductive. Means-testing is often sold as fiscal realism, yet decades of evidence shows it misunderstands both cause and effect. Programs built around proving need consistently fall short because they make help harder to reach. Universal programs work better not because they are generous but because they are accessible, durable, and aligned with the realities of how people live. At a deeper level, means-testing confuses economic hardship with personal failure. We do not means-test civil rights, and we should not means-test the basic conditions required for stability—food, housing, healthcare, and a living wage. When we ask for people to prove their hardship, we are asking them to prove they deserve dignity. A tax system that raises money while rationing access to security through means-testing risks reinforcing inequality rather than repairing it.

Romney is right in his core premise that any serious solution will require taxing the rich. But his proposals should be understood as a floor, not a ceiling. Asking the wealthy to pay more going forward is necessary, but it is not sufficient. We must be honest about how race and power shaped the current system—and be bold enough to design one that repairs those outcomes. Fairness must account for the extraordinary windfalls the tax code has facilitated over decades—windfalls that compounded along racial and class lines. We cannot simply ask how to avoid a fiscal cliff. Avoiding the cliff is not enough; the real work is dismantling the system that keeps pushing the same people toward it.

Portia Allen-Kyle is a civil rights attorney and a Roosevelt Institute Fellow for Tax Policy.

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