Harris Policy Students See the Real-Life Impact of Tax Policy while Serving the Community

This tax season, 59 student volunteers from a single class at UChicago’s Harris School of Public Policy are helping Chicago taxpayers with low incomes claim hundreds of thousands of dollars that they are owed in refunds and tax credits.

The students are helping put that money back into people’s pockets as volunteer tax preparers with Ladder Up, a nonprofit that offers free tax preparation, legal help for tax-related issues, financial education, and other services for people with low incomes in the city and some suburban communities.

In 2023, 57 student volunteers assisted local residents in claiming nearly $724,000 through the program. Their work is part of a unique class at Harris: “Inequality, Household Finance, and Tax Policy,” taught by Damon Jones, associate professor and associate director of Harris’s Stone Center for Research on Wealth Inequality and Mobility.

Putting faces and stories to the data

 At the start of the term, students explore intersections of U.S. tax policy with racial, gender, and income inequality, discussing topics like the use of tax credits to transfer income to low-income households, the impact of tax refunds on families’ finances, and the nonprofit and for-profit service providers that people often rely on to file their taxes.

“Tax policy is part of our national policy to alleviate income inequality via redistribution through the tax system,” Jones said. “And large cash refund payments present a number of financial decisions to be made” in individual households. In fiscal year 2023, the average refund for Ladder Up clients was more than $1,400, a significant sum that many put toward housing, food, medical expenses, or savings.

While students read several case studies about the impact tax refunds can have on low-income households, “sitting there as a volunteer, talking with an actual person, brings to life some of the data we see about inequality,” said Jones.

"You’re seeing real-life financial situations that people experience, putting a personal angle on that data and on what household finances can look like for low-income families."

That’s why the volunteer requirement has been an integral part of the class since Jones began teaching it several years ago. “This is a service learning class,” he explained. “While the main point of the class is the educational experience, students are volunteering in service of Ladder Up’s mission and are serving the community.”

Ladder Up Executive Director Phyllis Cavallone-Jurek says that Harris volunteers are a crucial part of the organization’s commitment to giving people the resources they need to move up the economic ladder. Clients’ average household income is just over $21,000; nearly three-quarters are people of color.

In the under-resourced communities Ladder Up serves, the nonprofit’s free services are a much-needed alternative to for-profit tax preparers that can charge predatory fees or use unscrupulous practices. In addition, tax preparation meetings invite clients into broader financial conversations.

“We do tax prep, but that meeting with clients is also a financial counseling session,” she explained. “There’s an opportunity to have a rich conversation about taxes, banking, college financial aid — people come away a lot more empowered with great information.”

Briana Diaz, a second-year student in the Harris master’s program in public policy, learned in her undergraduate political science classes that “two-thirds of the welfare state is based in the tax code — so if you want to go into public policy, you need to study the tax code,” she said. For example, the Illinois legislature is currently considering a state-level child tax credit of up to $700 that the Illinois Economic Policy Institute estimates would reduce child poverty in the state by 7.6%.

Diaz and her fellow members of Jones’s class attended training in late January to become certified volunteer tax preparers. Each student then works at least one three-to-four-hour shift per week over six weeks at Ladder Up sites that include Kennedy-King College in Englewood, Harold Washington Library in the Loop, and the Brighton Park Public Library, where Diaz volunteers.

Clients meet first with an intake volunteer who verifies their eligibility for free tax preparation, then meet with a volunteer like Diaz who enters their income documentation into Ladder Up’s tax processing software. A seasoned tax preparer doublechecks the information and lets the client know what their likely refund or payment will be.

Ladder Up relies on about 900 volunteers annually to serve more than 13,500 tax preparation clients. Cavallone-Jurek says that the Harris partnership supplies a significant number of the organization’s talented, committed volunteers. “UChicago is consistently our number one university partner, bringing in the largest number of certified volunteers every year,” Cavallone-Jurek said.

“Harris students are smart, savvy, compassionate, and really care about serving hands-on and providing actionable help.”

Making connections

Among the eye-opening moments for Diaz during her time volunteering with Ladder Up has been a close-up look at how hard many Chicagoans work for low wages.

“I don’t know if I’m adding a narrative to the data, but it comes off as so much work to be poor in this country,” she said. “I’m mostly seeing clients with multiple W-2s who are cobbling work together. Three, four, five W-2s for gross earnings below $10,000.”

Other lessons that have struck Diaz during her first few volunteer sessions: how little many people understand about the complex U.S. tax system, how intimidating tax filing can be, and the number of low-income people who don’t have bank accounts.

“Even though I was aware of the issue growing up in a mostly Black and Latino area in South Chicago, it’s been surprising to me how many of our clients are unbanked,” she said.

Diaz will graduate in June and is seeking a job in municipal finance; after gaining some experience in finance, she envisions working toward solutions for people like the Ladder Up clients she serves. “I keep coming back to that issue of the unbanked population. It’s a huge issue, with all kinds of effects like cutting people off from access to credit markets.

“I love academia, but it can sometimes feel far removed from people’s everyday lives, so the chance to work in the community with Ladder Up feels extra valuable — I’ve been struck by the relief I can see in many clients’ eyes. Volunteering is a highlight of my week.”

This article originally appeared at the University of Chicago Office of Civic Engagement. 

---

The application for our 2024 admissions cycle is open. To begin your graduate school journey with Harris, start your application here. If you know a great future Harris student, please refer them here.