Paul Constant, a writer at Civic Ventures, is cohost of "Pitchfork Economics" podcast.
He spoke recently with Dorothy A., Emory University's tax law professor. Brown discusses the US tax system.
Emory claims that the current tax system is a disadvantage to Black Americans, but it actively benefits white Americans.
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The United States' tax system offers many benefits to Americans who have money. This is a fact that is undisputed. It is also a known fact that white Americans are more wealthy than other races. While only 60% of the country is white, 86% of America's wealth is held by white Americans.
These two facts are enough to conclude that the American tax code is more favorable for white Americans than black Americans, resulting in racist outcomes. Dorothy A., Emory University's tax law professor, discusses the episode on "Pitchfork Economics". Brown discusses the profound differences between black and white taxpayers under the current tax code.
Brown's book, "The Whiteness Of Wealth: How the tax system impoverishes Black Americans -- and How We Can Fix it," argues that when Black and white Americans engage the same activity, such as getting married, buying a house, paying college tuition, or building wealth, our tax system benefits white Americans while disadvantageing Black Americans.
Brown gave an example of the conventional wisdom that marriage results in a tax cut. This tax cut is only for families in which one spouse is the primary wage-earner. If both spouses are employed and earn the same amount, the tax bill will be even more. For example, married couples earning around $50,000 per year will pay more tax than married couples whose spouses stay home with their children and one spouse earns $100,000 annually.
Brown stated, "What I found was that white married couples were more inclined to be in single-wage earner households and thus eligible for the tax cuts, but black married couples, regardless their income, were more likely be in what I call marriage penalty households and therefore pay higher taxes."
This distinction is crucial: If the tax code had to deliver outcomes that were detrimental to Black American families, then our solutions should be more focused on improving those outcomes. Brown stated that the joint return was created in 1948 when there were more Black married couples and wives who worked outside of the home. Was it intentional or benign neglect? It's the former, which, of course, requires a discriminatory effect on the part of Black taxpayers.
This is an example of how the tax code was created to benefit white wealth. The code must therefore be rewritten in order to eliminate its inherent racism.
Brown is happy to share her knowledge with Black families who want to reduce the impact of the tax code on them. She said, "I recommend Black Americans understand that they must take a defensive position."
Young Black home-buyers should be aware that the market has a history of undervaluing and taxing Black neighborhoods. However, it is possible to be house-poor in a White neighborhood. She advised that you don't take home equity loans if your neighborhood is racially diverse and Black.
She advises Black Americans to "put it in your retirement account and max it out, or open a 529 account for your child, niece or nephew."
Black Americans shouldn’t have to work twice the effort to manage their money in order to get a similar rate of tax as their white counterparts. Brown's solution to the tax code is simple. She stated that she would tax all income equally if she had final say. "Incomes from stocks would be subject to the same rate structure and income from wages as income from wages."
Brown said, "And I would have very few if any exclusions." Brown said that there would be one deduction for "a living allowance", which is what the Federal government would give you if your income was not sufficient to sustain a sustainable lifestyle. If you earned more, you would be subject to the progressive tax rate. There would be no loopholes.
Tax codes that accurately calculate profit and living expenses without regard to race would be a tax code that would help many people who are currently behind, including poor Americans, married professionals, and yes, Black Americans. Equity is not a zero-sum game. Subgroups of people do not have to be stopped in order to help others succeed. It's better for everyone if Black Americans can participate fully in the economy.
