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'The System for Building Wealth Is Designed for White Wealth' Janine Jackson ([link removed])


Janine Jackson interviewed Emory University's Dorothy A. Brown about racist tax policy for the April 16, 2021, episode ([link removed]) of CounterSpin. This is a lightly edited transcript.

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The Whiteness of Wealth

(Crown, 2021 ([link removed]) )

Janine Jackson: The centuries-old expression ([link removed](idiom)) about nothing being certain except death and taxes reflects a general belief that these things are universal, and come to us all despite apparent differences. It's not true, of course, and being a critical thinker today means reckoning with supposedly neutral systems whose disparate impacts on different people are not accidental. We like to think of law as something that exists somewhere, and we just find it and apply it, when, in reality, law is something created and forged for purpose, and sometimes you can still see the fingerprints.

In the United States today, the median white family—not average, but median: half above, half below—has a net worth (that's a weird term that means wealth or assets minus debts or liabilities) eight times ([link removed]) that of the median Black family. That's the same gap as 40 years ago, ([link removed]) despite gains that Black people have made in income and education and all of the things that you do to accrue wealth.

So what's going on, and what does it have to do with our system of taxation? Dorothy A. Brown is Asa Griggs Candler professor of law at Emory University School of Law, and author of the new book ([link removed]) The Whiteness of Wealth: How the Tax System Impoverishes Black Americans—and How We Can Fix It; it's out last month from Crown. She joins us now by phone from Atlanta. Welcome to CounterSpin, Dorothy Brown.

Dorothy A. Brown: Thanks so much for having me.

JJ: Let's first say, Black people are underpaid, and are shuttled into work sectors that are underpaid. But your focus is not employment income—how much money comes in—but tax policy, which is completely related, but it's not the same, right?

DAB: That's right. So, how much income we have helps inform how much we owe in taxes. But what my research ([link removed]) showed is when Black and white Americans engage in the same activity—whether it's work, whether it's owning a home, whether it's getting married, whether it's paying for college—tax policies subsidize ([link removed]) the way white Americans engage in the activity, while disadvantaging the way Black Americans engage in the activity.

JJ: So let's just get into that a little more: What are some of the ways that that works, that that happens?

DAB: We can start with what you talked about, with jobs. So we know that there's occupational segregation ([link removed]) , right? Some jobs are disproportionately filled by white Americans, and other jobs are disproportionately filled by Black Americans.

But there are tax subsidies associated with jobs. Think employer-provided retirement accounts: Any money that the employer puts in a retirement account, any money you put in a retirement account, is not taxed today, even though it's wage income. It will be taxed later, when you retire and withdraw the amount. And presumably, in 20, 30, 40 years, when you retire, you won't be working, and the amount of income taxes you pay on that retirement amount will be less.

JJ: Right.

DAB: Right? If you were to take the money today, add it to your other wage income, you'd be paying higher taxes. So it's a big tax break.

Well, what we know are jobs that are disproportionately held by white Americans are more likely to come with retirement benefits ([link removed]) . But even when a Black American is fortunate enough to get such a job, we are less likely to participate and contribute to that benefit, and if we are able to participate in that retirement account, we're more likely to withdraw an amount early that's subject to a tax penalty.

So how does this happen? Research shows ([link removed]) Black college graduates are more likely to send money to their parents or grandparents to help them pay for necessities, whereas white college graduates are more likely to receive money from their parents and grandparents that can help them with a down payment for a home, pay for K-12 private school for their children. So that even if, miraculously, we were to find a white American and a Black American making the same amount—we know that doesn't happen, right, because of wage discrimination in the labor market…

JJ: Right.

DAB: …but even if we find that, the Black worker, because their parents and grandparents suffered under Jim Crow, is going to be more likely to have less after-tax dollars, because they're going to send some money home.

JJ: You know, Jeremie Greer from the Corporation for Enterprise Development, told ([link removed]) me, “Income helps you get by, but wealth helps you get ahead,” and allows you to think about the future. And it's so critical. And if you don't have to think of it that way, well then, you don't think of it that way.

DAB: That’s right, that’s right.

JJ: Ok so, “That's just the law,” is what we would hear. And yet, we see corporations write tax law favorable to themselves. We see Congress carve out exceptions or offer rebates for specific individual companies, like, it looks like sausages being made. And yet we're somehow disinclined to think that that corruption and cronyism might include systemic racism.
Doroahty A. Brown:

Dorothy A. Brown: "The notion that you have to have a law say, 'We discriminate against Black people,' before we can find the law actually discriminates against Black people, defies logic and history."

DAB: Absolutely. And part of the problem is the IRS doesn't collect or publish statistics based on race ([link removed]) . So people can walk around saying, “Tax law is colorblind,” because when you go to the IRS statistics, it has nothing up there dealing with race.

In fact, I've been writing in this area for a couple of decades, and the typical white tax law professor ignores what I say, or pushes back ([link removed]) or marginalizes what I say, because their response is, “There's nothing in the code about race, there's nothing in tax law about race,” which ignores the disparate impact based on race.

We've seen this in Georgia, with voting rights ([link removed]) . There's nothing in the Republican-passed legislation, that's going to make it harder for Black people to vote, that says, “Black people, we want it to be harder for you to vote.”

JJ: Right.

DAB: But we all know that's going to be the impact, and that that was the intent behind the law. So the notion that you have to have a law say, “We discriminate against Black people,” before we can find the law actually discriminates against Black people, defies logic and history.

JJ: And everyone—“everyone,” I use the term loosely—but people agree that Black people are behind, are disadvantaged, whatever their explanation for that is. But then when it comes time to intervene, to allow—not help, but allow—to stop preventing Black people getting ahead, it becomes a whole different conversation, that's about the intervention and its unfairness. And I just wanted to ask you: Why have previous policy responses failed to adequately address the wealth gap? And then, what sort of responses could?

DAB: So we have a lot of research on the wealth gap ([link removed]) , and we have proposals for how to address it, but part of the problem is, you have the left and the right seeing different causes of it. And I have quarrels with both. The left sees this mainly as a function of historical discrimination that is brought into the 21st century; the right sees it as bad behavior on the part of Black Americans, right?

JJ: Mmm-mm.

DAB: So the left gets it wrong in this instance: Yes, it was historical discrimination, but the reason why wealth doesn't work the same way for white Americans as Black Americans today is because of choices white people make.

So let's take homeownership ([link removed]) : Most white homeowners live in neighborhoods with very few Black Americans. That's how they like it. That's what the research ([link removed]) shows. So progressive whites who live in neighborhoods with virtually no Black neighbors are part of why homeownership builds more wealth for white Americans ([link removed]) than Black Americans, because Black Americans typically live in racially diverse or all-Black neighborhoods, and the homes are not valued as greatly as the exact same home in an all-white neighborhood.

JJ: Mmm-mm.

DAB: Why? Because white prospective homebuyers don't want to live in those neighborhoods, so they're not valued as high. So that's not historical discrimination; that's 21st century today discrimination by white homeowners.

JJ: Right.

DAB: On the other side, we have the right that says, “Well, Black people just need to act more like white people.” We need to get married; we need to buy homes. I've already told you why buying a home isn't the ticket to wealth for Black Americans the way it is white Americans.

But getting married ([link removed]) : My research shows that when white people get married, they're more likely to get a tax cut. How? Because the tax law favors married couples with one single wage earner—one person who works in the paid labor market, the other person who works at home—that couple gets a tax cut. Couples like my parents (my mother was a nurse, my father was a plumber), they made roughly equal amounts: They don't get a tax cut—and for decades, they paid higher taxes.

So you have conservatives saying, "Black people, you just need to get married." And my research shows, well, when we do, we don't get a tax cut.

So part of the road to a solution is really understanding the problem. And one of the key pieces that I make in my book is the system of America for building wealth is designed for white wealth. It's designed for how white Americans engage in their activities, whether it's marriage or buying a home, in a way that Black Americans simply cannot replicate. And until we come to terms with our racist wealth-building system, no solution is going to fix it.

JJ: Let me ask you, finally, you've been working on this for a while, and you've seen the interest in the topic, or even the belief that it is a topic, shift.

DAB: [laughing] Yes.
Businessweek: A Tax Code Optimized for White Wealth Leaves Black Americans Behind

Businessweek (3/10/21 ([link removed]) )

JJ: After George Floyd's murder, you say in this Bloomberg Businessweek piece ([link removed]) from March, “Suddenly people wanted to talk about race and tax.” I don't want you to burn any bridges with reporters, but I am curious, when you talk to media, where do you have to start? Do you find people disbelieving? Are they ready to see that this is real? And it doesn't have to be media, but just the general public—do you feel like the moment is right to push this forward?

DAB: I do, and I will say this: Post–George Floyd, the reporters who have called me have been terrific, and have been in a listening mode; they have not been in an argumentative mode. Pre–George Floyd, white reporters that I've talked to, that I've tried to talk to about race, have been very dismissive. And they're different people; those people did not come back to me post–George Floyd, right? The people who came to me were all new white reporters who I hadn't talked to before, who actually saw the moment and wanted to get better informed. So that's kind of heartening, to be honest with you. I haven't had the pushback.

And I will say, over the years, the audiences that gave me the most comfort were the general public audiences. They were hungry for what I had to say, and curious, and were listening and attentive. It would be white academics who didn't want to hear anything I had to say. So the general public has always been an encouragement for me in doing this work.

JJ: We've been speaking with Dorothy A. Brown, Asa Griggs Candler professor of law at Emory University School of Law. The book ([link removed]) is The Whiteness of Wealth: How the Tax System Impoverishes Black Americans—and How We Can Fix It; it's out now from Crown. Thank you so much, Dorothy Brown, for joining us this week on CounterSpin.

DAB: Thanks for having me.

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