In this edition of Author Talks, McKinsey’s Julia Arnous speaks with Emory University law professor Dorothy A. Brown, a nationally recognized scholar on race, class, and tax policy, about her latest book, The Whiteness of Wealth: How the Tax System Impoverishes Black Americans—and How We Can Fix It (Crown, March 2021). From college and jobs to marriage and homeownership, The Whiteness of Wealth explores the racial disparities in tax laws. An edited version of the conversation follows.
What problem were you trying to solve with this book?
My research shows that whenever Black Americans engage in the same activity as White Americans, tax policy will advantage how White Americans engage in the activity and disadvantage how Black Americans engage in the activity.
Take marriage, for example. Most people think that when you get married, you get a tax cut. But it only works if you are in a single-wage-earner household, or in a household where one worker contributes significantly more income than the other. That household will get a tax cut when the couple gets married. However, if you and your spouse make roughly equal amounts, you won’t get a tax cut. And guess what? Census Bureau research shows that a household with a single wage earner or a household where one spouse contributes significantly more than the other is more likely to be a White household—whereas the equal-earner households with two full-time workers are more likely to be Black households.
The IRS doesn’t collect or publish statistics by race, so I had to become a detective of sorts to find this out. It’s hard to think about race and tax because the federal government doesn’t publish those statistics, which would cause us to think, “It must be because there’s no racial disparity in tax laws,” when the opposite is true.
What surprised you most during your research?
There was a moment when I thought I was not going to finish the book. I saw a statistic that was so depressing, I closed my laptop and said, “I can’t do this.” The statistic was that 60 percent of Black college students don’t graduate. It caused me to reflect on my own privilege. My mother was a nurse, and my father was a plumber. We didn’t grow up with a lot of money, but my parents knew that I was going to college, I was going to graduate, and I was going to do it in four years. Of course that’s what I was going to do. It never occurred to me to think, well, that was my experience, but what were the experiences of other Black Americans?
When I came across that statistic, I left my house, and I went to the beach. I stared at the ocean for a couple of hours. I calmed down, and I said to myself, “I don’t have to do any more reading tonight. But tomorrow I’m going to get back up on this horse, and I’m going to finish it.”
How have others responded to your findings?
When I would share my research with my mother or with the Atlanta families who were interviewed for the book, they were blown away. They had always known something was wrong, but until then, they didn’t know what it was. The book really brought the inequities to light.
My mother was one of my fact-checkers. She would read each chapter and tell me if I got it right. When she read the marriage chapter, she paused and said, “They owe me and James reparations.” My mother had never said “reparations” before. She was so upset and so outraged, because she remembered how hard it was for her and my father, James, to make ends meet. The idea that their tax bill was higher because they were married to each other just seemed so unfair to her.
My team and I interviewed a couple I call the 21st-century version of my parents, and they had a similar reaction when they learned what my research had uncovered: “This is such an unfair system. How can we get ahead?”
What needs to change so that Black families can get ahead?
With respect to marriage, the easy solution is that we don’t file jointly anymore. Every individual American pays their own taxes. That’s how it was in the beginning; it wasn’t innate in our tax system that we had to allow married couples to file a joint return. If we required everyone to file individual tax returns, no longer would marriage impact your tax bill—which is ideally what I would like.
When I think about the deductions, loopholes, and exemptions—they were all made with White Americans in mind. They were all made to advantage White taxpayers, which left Black taxpayers behind because Black Americans experience these things differently. Whether it’s marriage or homeownership or college or jobs, we live in a society where race, unfortunately, still matters.
My solution is getting rid of the loopholes, exemptions, and deductions, taxing all income at the same rate—no more preferential treatment for capital gains—and allowing everyone a living allowance deduction. What does it take to thrive in your geographical area? That amount of money you don’t pay tax on—only the amount you earn in excess. What if you earn less than that amount? In that case, you get money from the government. It’s like a very expanded earned income tax credit.
Why do you think this book is resonating right now?
I think this book is resonating with people in part because of the summer of 2020. That summer, we were in the middle of a pandemic, we saw the murder of George Floyd, and we saw the disparity in who was “essential” and had to go out to work versus who could work from home. White Americans were home watching George Floyd getting murdered, and it was on a loop on TV that you couldn’t escape.
We saw multiracial coalitions take to the streets to protest. I started getting calls from reporters talking about race, and about systemic racism in corporate America—and I’d never gotten those calls before. It was because people saw this as a problem, and they wanted to understand it, and then think about ways to fix it.
I’m heartened that the book is out now, that people are willing to have a conversation about systemic racism in tax, and that COVID-19 has made people aware of systemic racism in health. Even if you want to, you can’t look away; wherever you look, there are disparities. Whether they’re disparities in access to the vaccine, in who has to take public transportation, or who can stay home, systemic racism is everywhere, and people are seeing it.
I am optimistic that we’re in a moment where because of everything we’ve dealt with with COVID-19, because every other day there’s another unarmed Black person getting murdered by the police, White Americans are waking up and realizing that silence just doesn’t cut it anymore—and that if you’re going to be an ally, you’re going to have to do more than just say, “Black lives matter.” What are you prepared to do in terms of “Black lives matter”?
White allies can talk about all the times luck played a role. They can talk about their inheritance. They can talk about the gifts they’ve received. They can talk about how a parent or grandparent paid for college. That stuff is considered taboo, but we need more White Americans talking about it.
