Dorothy A. Brown, a tax expert, discusses how the tax system disadvantages Black Americans. She reveals how race affects IRS audits, tax owed, breaks, and benefits. The podcast explores systemic racism in tax policy and the need for change to address wealth gaps.
Black taxpayers are audited more, linked to race; lower-income earners face audit targeting for specific benefits.
Tax policies disadvantage black couples economically through marriage penalties; historical wealth disparities worsen financial standing.
Deep dives
The Impact of Taxes on Racial Disparities
Taxes play a crucial role in racial disparities, with the IRS disproportionately auditing black taxpayers 3 to 5 times more than others. Lower-income earners claiming specific tax benefits are targeted due to cost-effectiveness. Despite IRS claims of colorblindness, racial disparities stem from existing institutional priorities and selection processes, highlighting a lack of transparency in audit selection.
Marriage Benefit vs. Penalty for Black Americans
The tax system's marriage benefit becomes a penalty for black couples with similar income levels. Unlike white couples, where one spouse working garners tax benefits, black couples with both partners contributing face increased taxes. Historical disparities in wealth and housing segregation further hinder black Americans, making marriage and homeownership less financially advantageous.
Student Loan Debt and Tax Implications
Tax policies compound student loan debt issues for black individuals. The $2,500 interest deduction cap disproportionately impacts black college graduates with higher debt loads. Additionally, the marriage penalty further restricts tax benefits, exacerbating financial challenges for married black graduates with significant debt.
Silent Wealth Killer: Tax Policies and Racial Wealth Gap
Tax policies contribute significantly to the racial wealth gap, disadvantaging black families economically. Understanding how tax codes affect financial outlooks can mitigate damage on an individual level. However, systemic changes addressing racial disparities entrenched in tax policies are essential to prevent perpetuation of wealth inequalities.
It's that time of year again: time to file your taxes. And this week on the pod, we're revisiting our conversation with Dorothy A. Brown, a tax expert and author of The Whiteness Of Wealth: How The Tax System Impoverishes Black Americans And How To Fix It. She talks through the racial landmines in our tax code and how your race plays a big role in whether you get audited, how much you might owe the IRS, which tax breaks you can get, and even which benefits you can claim.