Book Review
The Whiteness of Wealth: How the Tax System Impoverishes Black Americans--and How We Can Fix It
by Dorothy A. Brown. Crown, 2021. 288 pages. $27.00, hardcover.
This book is a powerful - and very influential - exposé of racism in the American taxation system. Named as one of the best books of the year by NPR and Fortune, it is by a tax lawyer and Georgetown University Law Center professor.
“Important reading for those who want to understand how inequality is built into the bedrock of American society, and what a more equitable future might look like.”—Ibram X. Kendi, author of How to Be an Antiracist.
The author uses evidence from her long decades of cross-disciplinary research to show that U.S. tax law isn’t color-blind. This book includes the personal stories of white and black cross-income Atlanta families, to demonstrate how American tax law rewards the preferences and practices of whites while pushing black people further behind. In essence, tax policies build and protect intergenerational white wealth and exacerbate the racial wealth gap by subsidizing activities and personal choices that disproportionately benefit white taxpayers. Brown's data shows institutional tax disparities in education, workplace subsidies, and wealth building - among several other slices of the economy.
For instance, according to the Federal Reserve’s 2019 Survey of Consumer Finances, white median wealth ($188,200) was approximately eight times the wealth of the typical Black family ($24,100). The racial wealth gap has almost not changed since the 1950s and 1960s, has continued as U.S. overall household wealth increased, and currently persists because of the huge share of white wealth.
Brown advocates the following changes:
- Publish tax data by race.
- Maintain a progressive income tax system but with no exclusions; a single deduction; and no preferential rates, such as on capital gains.
- Establish a tax credit to compensate for historical racism.
Proposals for using wealth to impose tax policy are nothing new. Prominent politicians, such as Bernie Sanders and Elizabeth Warren, have promoted a wealth tax on high-wealth Americans. However, Brown’s wealth-based tax credit would avoid many of the pitfalls of wealth taxes.
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