As the 2020 Decennial Census begins releasing public data, the question of how the U.S. Census Department defines race and ethnicity is drawing attention. In particular, there is growing concern that the category of “Another Race” becomes increasingly popular and masks significant differences in the racial identities of Americans. In the 2020 release, the number of census respondents identifying themselves as “another race” surpassed “Black or African American,” becoming the second largest race category, behind “White.” Race is a social construct, so the broadening of the categories of race and ethnicity and the evolution of sentiment about racial identity must necessarily lead to this result. However, the marked changes lead to a growing sense that census categories for race and ethnicity no longer reflect the demographic makeup of the United States, and failure to address these data quality issues could have important implications for racial equity in government. and politics.

Census Bureau race and ethnicity data is used for a multitude of government decisions, including redistribution, calculating funding formulas, monitoring compliance, and setting policy goals. Data from the 2020 census will be used to allocate $ 1.5 trillion in federal spending each year and is essential for assessing the successes and failures of policy. Because the IRS does not collect data on the race and ethnicity of tax filers, census data is one of the only tools available to tax policy analysts to understand the racial impact of tax laws in Canada. our country. ITEP used it to build, for example, a fiscal microsimulation model capable of disaggregating the incidence of certain types of taxes by race and ethnicity.

The census has changed the way he asks questions in the past and may choose to do so again in the future. As the Biden administration makes data a central part of its plan to achieve greater racial equity, it has the opportunity to implement research-backed changes that will improve our understanding of race and ethnicity. in the United States, and in turn, our ability to draw meaningful conclusions about the impact of our tax laws on tax filers of different races.

The problem

In the most recent version of the census, nearly 50 million respondents identified another race, alone or in combination with other racial categories, an increase of 129% since 2010. About 28 million of these people have chosen as the only race. Research shows that the majority of respondents who identify as another race are Hispanic or Latino.

This is in part because the current design of the census survey regarding race and ethnicity is guided by an Office of Management and Budget standard established in 1997, which requires that a distinction be made. made between racial categories and ethnic categories. This presents a challenge for survey respondents who do not understand the distinction between race and ethnicity or, more likely, who view their race and ethnicity as one and the same.

More generally, there have long been concerns that the OMB’s racial categories are too broad and should be further disaggregated. Racial categories such as “Black or African American” and “Asian” apply the same label to groups of people whose identities, historical backgrounds, and lived experiences may be very different. This loss of granularity is compounded by the fact that racial and ethnic groups outside of non-Hispanic whites have historically been underestimated – a problem exacerbated by disruption from COVID and litigation surrounding the 2020 census. This loss of data detailed and precise has important implications for racial equity.

In the world of tax policy, efforts to understand the impact of our tax code on racial equity rely heavily on this racial census data. The IRS, which collects administrative tax data, does not collect data on the race or ethnicity of U.S. taxpayers. Researchers interested in questions surrounding the racial impacts of tax policy should instead use census data to fill these gaps.

This is important because while the IRS does not collect information on race, racial inequalities are built into the U.S. tax system. We know, for example, that favorable tax treatment of investment income over labor income disproportionately favors white taxpayers, who have benefited from historic policies that have contributed to the wealth of white households and the middle class. white while systematically excluding or subjugating Blacks, Hispanics and Indigenous people. people.

Detailed data on race and ethnicity can provide empirical evidence that the tax system has racialized impacts, that it has contributed to a multitude of socioeconomic disparities, and that it can be a powerful tool in reducing some of these divisions. . But data that obscures race makes analyzing the racial effects of tax policy and evaluating potential solutions even more difficult.

Data collection is a political choice

The way the government chooses to collect and report data is not set in stone, and the census is constantly evolving to capture the changing social, demographic, and economic landscape of the United States. Race and ethnicity in particular are defined by the social and political context of a given era and have undergone many iterations since the first census in 1790. It was not until 1960 that respondents were able to self-report. identify their race – prior to this, race was determined by enumerators.

From a social point of view, the new census categories represent a challenge. The United States has a four-century history that began with the creation of racial distinctions and continues to this day the racist practice of exclusion, discrimination and social hierarchy. We should certainly aspire to dismantle the remaining vestiges of this social construction. But we have to do it in a way that doesn’t diminish the valuable political information we can glean from race-based data.

As early as 2008, the Census Bureau recognized that improving reports on race and ethnicity, especially for Hispanics and Latin Americans, was an area that needed methodological attention. After years of research, the 2015 National Content Test recommended combining questions on race and ethnicity to better capture these respondents. Empirical testing of a combined race / ethnicity question revealed that 70% of Hispanic or Latino respondents chose Hispanic or Latino as their only racial identity, and the number of people checking “Another Race” is fell to less than a percentage point. In other words, a combined race and ethnicity question better reflects how respondents identify themselves and offers richer racial / ethnic data for Hispanic and Latino respondents in particular.

The 2015 national content test also recommended other changes, including the addition of a Middle East and North Africa (MENA) category. It also reduced the number of respondents who had previously answered “Another race” and provides better insight into how people identify their race and ethnicity.

While the Trump administration has chosen not to implement these changes until the 2020 census, the Biden administration can ensure that future household surveys adopt these recommendations to collect more comprehensive data on race in United States. The Biden administration has already recognized that collecting data is a first step towards greater fairness and has made it clear its commitment to identifying data gaps within the federal government. Ultimately, the decision to improve race and ethnicity reporting is a political choice with real political consequences.

As concepts of race and ethnicity continue to evolve and the American population becomes increasingly diverse, the future of racial equity depends on data that accurately captures the nuances of race in the United States. . With richer data on race, researchers and officials will be in a better position to understand the nature and extent of racial disparities, to target government efforts to eliminate them, and to ensure precise oversight and accountability.