In tax season, green isn’t the only color that matters

Yes, Uncle Sam wants everyone’s money. But in a ground-breaking book, an Emory University professor lays out how tax policies are an invisible mechanism for inequity.

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Even in a system that many think is broken for myriad reasons, taxes can be punishing because of race, Natalie Moore writes

Even in a system that many think is broken for myriad reasons, taxes can be punishing because of race, Natalie Moore writes.

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Tax season is upon us, and Dorothy Brown has a message: Green is not the only color that matters.

She’s an Emory University professor who documents racism in American tax codes. Her book “The Whiteness of Wealth: How the Tax System Impoverishes Black Americans – and How We Can Fix it” is ground-breaking. True, Uncle Sam wants everyone’s money. But even in a system that many think is broken for myriad reasons, taxes can be punishing because of race.

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Throughout the book, Brown lays out how those policies are an invisible mechanism for inequity. On the surface, most people don’t think taxes discriminate. Taxes are seen as color-blind, but they affect housing, jobs and higher education. All of which contribute to the racial wealth gap.

Brown went into tax law thinking she could escape race. As a Black woman, she quickly learned otherwise. Brown first came to this work when she did her parents’ taxes and understood that the concept of “horizontal equity” was incorrect. A married couple with one working spouse who, say, makes $100,000, is not in the same circumstances as a nurse and a plumber who earn $50,000 each. The latter is more likely to be a Black couple and they won’t get the tax break that the single-earner white couple will.

Here’s another example.

I first learned of Brown’s scholarship when she wrote a paper on pre-White House Barack and Michelle Obama’s tax returns from 2000-2004. Their combined annual income fluctuated but was more than $200,000. Even with that level of income, the Obamas did not resemble their financial peers, who are disproportionately white. They more closely resembled their racial peers, who disproportionately have much lower incomes. And in their investments, the Obamas appeared more like households earning less than $100,000, because they didn’t diversify their portfolio in the stock market.

The Obamas paid more in taxes than their financial peers because they had lower itemized deductions than their higher-income financial peers. Couples are subjected to significant marriage penalties if one spouse contributes close to 50% of household income like Michelle Obama did. At one point she surpassed 50%. Meanwhile, during that time the median contribution to household income by wives was approximately 35%.

Lest you think Brown is only writing about six-figure households: Her point is that Black women have historically worked outside the home more than white women, and therefore married Black couples are more likely to pay a penalty than married white couples. And Black husbands and wives are the most likely to contribute roughly equal amounts to household income.

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As Brown writes, “Today, Black Americans of all income levels are equally invisible when it comes to shaping policy but are paying more in taxes than their white peers because our tax laws were designed with white Americans in mind. That’s why no solution proposed by either the right or the left — not better jobs, not increased homeownership, and not more access to higher education — will be effective without significant and fundamental tax reform.”

Her solutions are bold and creative, such as completely rethinking tax deductions. Without getting into the weeds of tax policies, Brown’s research accentuates another point: Race- neutral policies inadvertently make whiteness the default. Nowhere in the tax code is race mentioned by name. And so-called race-neutral policies permeate all sorts of aspects of our lives, including in Chicago.

Intentionality is key to reversing the harm of racism and understanding how certain policies only benefit one group of people or exclude another group. With the tax code, the people making the laws don’t understand day-to-day realities of Black Americans, or for that matter, non-white Americans. And that can be applied in just about any institution or system in this country.

Natalie Moore is a reporter for WBEZ.

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