This article raises the question of whether the Code systematically favors whites over blacks. In recent years a small number of scholars in the legal academy have become known as critical race theorists. One main thrust of critical race theory is a belief that racial subordination is everywhere, a structural aspect of all parts of American society. If this part of critical race theory has merit, then every important American institution should reflect racial subordination, even such a seemingly neutral institution as the American tax system.
Discrimination connotes that persons who are similarly situated except for race are not treated similarly. This definition presupposes, however, some standard for determining when people are similarly situated. In the context of the Code, everyday tax policy analysis provides us a ready tool for this analysis. In Commissioner v. Glenshaw Glass, the Supreme Court defined income as “all accessions to wealth, clearly realized, and over which the taxpayers have complete dominion.” Since then generations of tax scholars have used this definition to craft a conception of a comprehensive income tax base. Our standard for when persons are similarly situated, therefore, is when they have the same income, and we too use the Glenshaw Glass definition of income.
Of course, many provisions of the Code deviate from the ideal of taxing all income in the comprehensive income tax base. Sometimes the Code compromises the ideal in order to achieve a more administratively practical rule. More often, Congress has decided to encourage particular lifestyles or behaviors by holding out tax benefits as an incentive.