Three Ways African Americans Are Disadvantaged by Tax Code in Urban Areas

In the U.S. tax system, Black Americans in cities are at a particular disadvantage. Photographer: PeopleImages/E+

There is a unique emotional and financial burden for African Americans around tax day. If you are not white, married, a man, a homeowner, and/or a wealthy corporate executive, the tax system has historically been a cinder block on your finances. This is a topic examined in great detail in Emory University law professor Dorothy A. Brown’s recent book, The Whiteness of Wealth. Brown writes that U.S. tax policy has hampered, and at times erased, African Americans’ ability to generate wealth, even when accounting for the various forms of tax reform passed over the years. It’s not that tax policy is written with explicit discriminatory dimensions, but rather it has been drafted in ways that structurally advantage white households, especially those who live outside of central urban neighborhoods. 

“Once I looked at the history of taxation in America, it became clear why so many tax policies have drastically different impacts on Black and white families,” Brown writes in the book. “They were created during a time when Black families paid into the system without having the same legal rights to live, work, marry, vote, or receive an education as their white peers.”

Looking at Brown’s research, it’s notable how these tax disadvantages are more pronounced for Black people who live in cities. The strikes seem to weigh heaviest upon renters, workers without benefits, single people and working women with children, all traits of typical city dwellers, particularly when race is factored in — African Americans are more likely to live in cities or inner-ring suburbs of cities.

This is not to say that Black families who live in higher-income suburbs and rural communities are exempt from tax grievances: Brown’s research shows that tax policies hinder African Americans at every income level, no matter where they live. It’s been reported recently that southern Black farmers are audited and foreclosed upon at disproportionate rates. But outside of the agricultural sector, signs point to the city as a locus of tax punishment — and that’s before looking at other penalties such as local property taxes that skew higher in low-income city neighborhoods than in wealthier ones.

Brown offered the example of her home city of Atlanta as “a microcosm of what is going on nationally.” She writes in her book:

While Atlanta, has a unique history, the struggle of the Black middle class here is representative of national trends. Because of tax policy decisions made long ago, Black married couples start off behind their white peers. … They work in lower-paying jobs than their qualifications would suggest, and they support extended family in ways foreign to most of their white peers. From one generation to the next, Black wealth diminishes, evaporates, and is stolen by systemic racism. Meanwhile, white families continue to receive and accumulate wealth, scooping up tax cuts along the way.

In an interview with CityLab, Brown unpacked three kinds of tax policies that produce these inequities in U.S. cities, and ideas for reform.

Click here to read more.

SOURCE: Bloomberg, Brentin Mock