Foregone tax breaks compound into large wealth gaps over time.

Evidence

The implications of this go far beyond the forms you file every April. In the long run, tax policy affects whether and how you’ll be able to build wealth. If you’re eligible for tax breaks, you either pay less in taxes throughout the year or receive a larger refund in the spring. If, like my parents, you’re considered ineligible for a particular tax break, you never see that money. One missed tax break may not sound like much, but those dollars not given to Uncle Sam can be put into your bank account, invested in stocks or property, or used to build home equity through improvements or repairs every year. Think of that money as an annual pay raise—but if you do not get it, you cannot save it. Over time those dollars, or the lack of them, add up to increased or depleted wealth. — Dorothy A. Brown, The Whiteness of Wealth, 39

Categorization

• XREF: The compounding mechanics link to the reader’s tree-infrastructure and sacrifice articles’ shared theme of small differential acts accumulating into structural divergence. — connects to: Income effects rely on long differences plus a parallel-trends unemployment check. — Sebastian Doerr et al., Financial Crises and Political…, 110