Planet Money Tax Code Switch
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Apr 19, 2023 Dorothy Brown, a Georgetown law professor and author of "The Whiteness of Wealth," discusses the stark racial disparities within the American tax system. She reveals that Black taxpayers face audits at rates three to five times higher than others, largely due to their use of the Earned Income Tax Credit. Dorothy highlights the complicated intersections of race, marriage, and tax policies, alongside the historical injustices in housing and education, which have perpetuated wealth inequality. Her insights urge a critical reexamination of systemic biases in taxation.
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Racial Disparity in IRS Audits
- Black taxpayers are 3-5 times more likely to be audited than others.
- This disparity is linked to the Earned Income Tax Credit, which is claimed by more Black taxpayers.
EITC Audits and the "Doom Loop"
- The IRS disproportionately audits lower-income taxpayers claiming the EITC.
- It's cheaper to audit lower earners by mail, creating a potential "doom loop."
Dorothy Brown's Inspiration
- Dorothy Brown's parents, a nurse and plumber, seemed to pay high taxes despite modest incomes.
- This led her to research race in tax law.
