California Moves to Prevent Taxation on Reparations Payments

Assemblymember Tina McKinnor from California is working to ensure reparations payments to Black residents remain untaxed if they come to fruition. According to McKinnor, for generations, descendants of formerly enslaved individuals have faced injustice and missed economic opportunities. She emphasizes that reparations should repair harm without taxation reducing their impact.

Assembly Bill 2186 aims to exempt future reparations payments or benefits from state personal income taxes if federal, state, or local reparations programs are approved. The bill specifies that starting from 2027 until 2032, reparations received during a taxable year won’t be included in gross income. It defines ‘reparations’ as monetary payments, grants, trust distributions, debt forgiveness, or any other financial compensations.

Introduced by McKinnor, the measure seeks a review by the California Senate. If successful, it awaits Governor Gavin Newsom’s consideration. McKinnor states California is actively preparing for reparations programs, stressing the need to ensure recipients fully benefit from such efforts.

Progressive Rep. Shri Thanedar from Michigan has also revived reparations efforts at the federal level with a bill proposing the creation of a commission to study and distribute land reparations for slave descendants in the U.S.

While California leads with a reparations commission to study history and recommend compensations, the path remains challenging. Governor Newsom has previously rejected several related bills to avoid legal conflicts. Furthermore, no current gubernatorial candidate seems to prioritize reparations, adding uncertainty to the initiative’s future.

Civil rights attorney Lisa Holder, previously part of California’s Reparations Task Force, highlights the complexity and length of advancing reparations. According to Holder, resolving centuries of inequality requires extensive legal changes.