How the US Tax Code Disadvantages Black Americans
According to a law professor who has spent her career documenting racism in the tax system, America has a major racial wealth gap that is partly due to the way the federal tax code is written.
Indeed, the median wealth of white families is nearly eight times that of black families and five times that of Hispanic families, which have been held back by loopholes in the US tax system, according to Dorothy A. Brown, a law professor at the ‘Emory University. and the author of “The Whiteness of Wealth: How the Tax System Is Impoverishing Black Americans — and How We Can Fix It.”
“What the tax law does every April 15 is make sure that black Americans pay higher taxes than their white peers because black and white Americans are engaged in the same activity, but the tax law has a different impact because we bring our racial identities onto our tax forms,” Brown told CBS News’ Tanya Rivero and Tony Dokoupil.
The wedding tax
Differences in how married couples are taxed, compared to singles, are one of the ways black families end up being disadvantaged, according to Brown.
“When white and black Americans marry, the way we tax the marriage varies depending on how many spouses are working,” she said.
When a couple gets married, their taxes can go up or down. If only one spouse works, the couple benefits from a tax reduction. But if both spouses are working in the paid labor market, they will likely see their tax rate increase.
How is racing involved? Census Bureau data shows that white married couples are more likely to have a stay-at-home spouse and get a tax cut, while in black married couples both partners are more likely to be spouses. employees and therefore pay higher taxes.
Brown said she made the discovery while helping her parents, who earn less than her, file their taxes.
“I pay my parents’ taxes and I make more money than them and I’m supposed to pay a lot more taxes than them and I don’t. And I can’t understand,” she said. said. “It wasn’t until I became a law professor and had the luxury of time that I stumbled upon the answer. My parents paid so much tax because they were married.”
Single file only, thank you
She blames the federal government, which she says has taken no action to stop penalizing dual-income households and help address tax policy and race issues. As a result, the tax code remains discriminatory, Brown said.
But there is a solution, according to Brown. The United States can overrule marriage considerations and tax people as individuals.
“I’m proposing, like Canada and others, that we have a single filing — no joint filings, so when you get married your tax bill doesn’t change,” Brown said.