The heart of the Voting Rights Act ruled unconstitutional by the Supreme Court

The problem is that the racism the Voting Rights Act attempts to counteract never really went away.

This August it will be exactly fifty years since Martin Luther King Jr stood and told over quarter of a million people: “I have a dream.” It was one of the defining moments of the civil rights movement, and it led to the Voting Rights Act just two years later which outlawed discriminatory voting practices in the historically racist south.

The Supreme Court in America just celebrated this anniversary by striking down one of the central provisions of that Act, at a time when American civil liberties are already being infringed-upon by an invasive surveillance state – and at a time, moreover, when the case of the shooting of a young black teenager, Trayvon Martin, has brought racial tensions in the South to the fore again too. It's not been a good year for the "land of the free".

In a devastating ruling, the Supreme Court of the United States yesterday voted as section four of the Act, which gives federal oversight to the voting procedures of certain southern states, unconstitutional. Changes in these procedures will now have to be challenged after the fact in court – an expensive and difficult process.

“During [the last 40 years], largely because of the Voting Rights Act, voting tests were abolished, disparities in voter registration and turnout due to race were erased, and African-Americans attained political office in record numbers,” said Chief Justice Roberts in his opinion to the court. “And yet the coverage formula that Congress reauthorised in 2006 ignores these developments, keeping the focus on decades-old data relevant to decades-old problems, rather than current data reflecting current needs.”

Racism in the US, needless to say, is not as quick to die as Roberts seems to think. Martin Luther King's speech was itself given on an other auspicious anniversary, that of the Emancipation Proclamation outlawing slavery in the US. That historic document, signed 150 years ago, ended slavery, but began a century-long epoch of discrimination. King fought against it, and the Voting Rights Act was a significant victory, but the racism the Act attempts to counteract never really went away.

Roberts seems to genuinely believe that the fight against institutional racism has been won. Even if that were true, which it is not, the Act's real strength was its protection not just against overtly racist practices but against economic- and literacy-based voting tests that de facto discriminate against minorities or lower economic groups. These protections are still badly needed. Voter ID laws, which discriminate against minority groups less likely to have ID, have already been imposed by 30 states. Congressional districts are already gerrymandered to breaking-point to give disproportionate representation to wealthy, white Republicans and last year's election campaign was marred by dirty tactics like restricting early voting hours in counties with large black communities. If anything, the Voting Rights Act needed to be expanded, not gutted.

The Court's decision now puts the onus on Congress to justify federal oversight under the Act, which effectively rules it out – Congress is gridlocked and dominated by Republicans with an eye on the 2016 election, for whom this ruling is a godsend.

Justice Ruth Bader Ginsberg, a former civil rights lawyer, wrote a damning dissenting opinion. “The sad irony of today’s decision lies in [the Court's] utter failure to grasp why the VRA has proven effective,” she wrote. “The Court appears to believe that the VRA’s success in eliminating the specific devices extant in 1965 means that preclearance is no longer needed.”

“With that belief,” she concluded, “…history repeats itself.”

The decision has had immediate practical consequences. Changes in voting procedures that had required advance federal approval, including voter identification laws and restrictions on early voting, will now be subject only to after-the-fact litigation. Texas, one of the states now free to impose whatever voting restrictions it may choose, did not seem to even pause for breath. “With today’s decision the state’s voter ID law will take effect immediately,” Texas’ Republican attorney general Greg Abbott said today with relish, making the land of the free a little less free with every word.

Appalled, I mentioned the case to my room-mate here in New York this afternoon.

“Welcome to America,” she said.

Alabama residents outside the Supreme Court. Photograph: Getty Images

Nicky Woolf is reporting for the New Statesman from the US. He tweets @NickyWoolf.

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Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.