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TAX POLICY IS A PART OF THE BLACK AMERICAN STORY
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Brakeyshia Samms
June 18, 2024
Institute on Taxation and Economic Policy
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_ Policymakers can only make sensible decisions when they understand
what the tax system’s shortcomings have done to Black communities. _
A sign reading "Stop Sugarcoating American History" sits at the feet
of demonstrators in a March against racism on Juneteenth, June 19,
2020 from John L Kelly Field to the Milton High School in Milton, MA,
Blake Nissen for The Boston Globe via Getty Images
Juneteenth is a reminder of the hard-fought victories that helped
Black Americans secure their delayed
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freedom, justice, and suffrage. And in the chapters about tax policy,
the tales are no less fraught. From America’s prologue to the last
paragraph of the Civil War, governments raised more tax revenue from
the taxation of Black bodies
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than any other source.
Though Black Americans are no longer taxed as property, their
relationship with the property tax system remains challenging. Today,
for instance, Black families pay more property taxes
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than white Americans who own comparable properties. Black people went
from being literally taxed as property to being slighted by the
property tax system – perpetuating deep economic inequality for a
group of people who have always suffered on the soil of this land.
The good news is that progress has been made. Genuine tax equity is
not only possible, but it’s within reach.
The civil rights battles of the past 70 years
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showed how Black leaders and lawmakers can work together to achieve
progress in housing, voting, education, jobs, health care, and taxes
to redress racial harms. The time is now for policymakers to continue
the march
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toward a more equitable tax code for Black households.
Understanding what led us to this point means acknowledging the
brutalization of Black Americans through slavery. This inhumane
institution included the taxation of Black people as property. This
was no minor issue. Slave taxes were a massive revenue source that
paid for public investments that benefited white slaveholders and
non-slaveholders alike. For example, these taxes financed the
Louisiana Purchase
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which resulted in material and economic gain that built the foundation
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racial wealth gap we see today.
The conclusion of the Civil War chapter and the abolition of slavery
ended the taxation of Black men, women, and children as property. It
also ushered in overdue civil rights
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for Black people in America. This was a jubilant section of the
American story. Legislatures in some states raised property
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taxes to invest in public education and other programs to help
formerly enslaved Black Americans get acclimated to the economy they
built for free.
The excitement did not last long.
Ultimately, the Reconstruction chapter continued tax injustices
against Black people in other forms, especially against Black elected
officials.
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In 1875, Alabama created a new constitution that placed tight property
tax limits
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still in place today. Tax limits make it more difficult to adequately
fund high-quality services that heavily depend on property taxes, like
schools, roads, and firefighters.
At the turn of the century, a new part of the story began to unfold.
On the tax front, this often took the form of blatantly discriminatory
property tax assessments [[link removed]].
White policymakers — particularly in Mississippi
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— used highly restrictive property tax limits
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and supermajority requirements
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to weaken school funding in Black communities, disempower Black
residents, and shift the tax base to more inequitable revenue policies
like sales taxes. Mississippi shifted its tax base from white property
owners to poorer Black households in 1932 through the advent of the
modern sales tax
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Black people, with substantially less income, kept paying just as much
as their white counterparts, if not more,
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schools while their own schools deteriorated.
In the years that followed, exclusionary housing policies
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bolstered white wealth while locking many Black families out of
homeownership. The impact of those policies is still felt today.
Predominantly white neighborhoods can generally make larger
investments in public services like education and transportation,
because they have larger revenue bases with higher home values, while
Black people are overrepresented
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in under-resourced communities.
Today, as home prices continue to rise,
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an unbalanced property tax system hinders Black households’ means of
accumulating wealth
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Black families in gentrifying areas
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that do not offer income-based property tax solutions
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struggle to afford their tax bills while Black renters, who pay
property taxes indirectly,
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cannot even save enough for a down payment. Against this backdrop, a
staggering racial homeownership gap
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persists.
Reforming property taxes, a vital source of funding
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for state and local government, can advance tax justice for Black
renters and homeowners and reverse some of the damage of the past four
centuries
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Property taxes vary widely, so lawmakers at the state and local level
must bring Black community leaders and advocates to the table and
discuss ways to fix these policies that acutely affect Black renters
and homeowners.
Policymakers can only make sensible decisions when they understand
what the property tax system’s shortcomings have done to Black
communities. Having inclusive conversations can reveal fundamental
problems like inaccurate assessments
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discriminatory appeals procedures
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and a lack of consideration of ability to pay
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in setting property tax bills. Focusing on these issues would allow
legislators and community advocates to reimagine a property tax system
that does not exacerbate racial inequities.
At the same time, it is important to avoid backsliding. Lately, too
many policymakers are promoting old ideas that are detrimental to
Black people like pairing property tax cuts with sales tax increases
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or establishing firm property tax limits
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– policies that will do nothing to advance the position of Black
Americans and may actually roll back some of the modest progress
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seen in recent years.
Instead, policymakers should adopt antiracist and practical appraisal
practices,
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use robust property tax circuit breaker
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programs, and implement and monitor fairer appeals practices
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to fix these ongoing issues.
Slavery remains America’s greatest sin and the tax policy stemming
from it undermined Black people’s attempts to climb out of poverty,
build wealth, and become truly free. Lawmakers cannot undo the past,
but they can surely learn from it
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A key philosophy behind the American story is justice. Lawmakers must
use that ethos for Black taxpayers in this latest section of the
narrative. Juneteenth provides us with a chance to reflect on this
history and begin writing a new chapter toward tax and racial justice.
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Brakeyshia Samms
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Institute on Taxation and Economic Policy
Brakeyshia Samms is the state policy analyst for the Institute on
Taxation and Economic Policy. Samms researches and writes about tax
policies to inform the public and supports advocates and policymakers
with analyses to help secure equitable tax policies, sound fiscal
practices, and policy solutions that remedy historical injustice.
* US Tax Policy; Black taxpayers; Property taxes and Black
homeownership;
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