April 27th Virtual Fair Housing Summit
| Human Rights |
|
|
Showing posts with label racial inequality. Show all posts
Showing posts with label racial inequality. Show all posts
Tuesday, April 11, 2023
Friday, March 24, 2023
Mortgage Lending Discrimination
Widespread Discriminatory Housing Appraisals Persist in the U.S.
A large number of Black property owners hold that white appraisers are using their race to determine the worth of their homes. About 97% of appraisers in the U. S. are white, according to the Bureau of Labor Statistics. The National Community Reinvestment Coalition (NCRC) and other advocates report the result is widespread appraisal discrimination. In 2022, the NCRC released a report finding that the average appraiser gave a value that was $7,000 higher to the same home owned by a white rather than a Black.
In one high-profile case, the Baltimore-area home of Dr. Nathan Connolly and Dr. Shani Mott was valued at nearly $300,000 more when they performed a “whitewashing experiment” in 2021, removing family photos and asking a white colleague to stand in for them. The couple has filed a lawsuit in Maryland, and the U. S. Department of Justice unusually issued a statement of interest in their case, just as they did last year with the case of Mr. Austin and Ms. Tate-Austin.
Redlining, a Depression-era practice that denied mortgages to people of color in certain neighborhoods, continues to drive down home values in Black neighborhoods, and today, racism and discrimination are still inextricably entwined in housing values.
A recent possibly discriminatory example is the case of Terry Horton who has been a Cincinnati landlord for over 10 years. He has rented to single mothers who rely on Section 8 housing assistance to pay their rent, and he and all of his tenants are Black. To free up cash for buying a new apartment building, he wanted to refinance his three-unit rental property in Cincinnati's North Avondale neighborhood, near Xavier University and with a roughly $39,000 median family income. His lender estimated the property’s value at around $500,000. But an appraiser declared his property worth only $359,000.
Horton believes that the first appraiser, who is white, discriminated against both him and his tenants because of their race - all were whom met the appraiser. Two more appraisals of Horton’s property had higher values, though by the time Horton reapplied for a loan based on the later values, interest rates had climbed so that it was not advisable to refinance his mortgage. “It was completely devastating,” Horton said. “It rips the whole bottom out when you come to the realization that because of the color of your skin, they’re devaluing your property.”
He recently filed a complaint to HUD with the National Community Reinvestment Coalition, which works for increased wealth in low-income communities. The complaint cites multiple methodological and factual errors in the first appraisal done by Brent Martin of Martin Appraisal Company. Martin Appraisal Company was subcontracted by Appraisal Nation, an appraisal management company used by Horton’s lender, Stratton Equities.
According to the complaint, Martin underreported the size the property by over 500 square feet, selected nearby properties of comparable size and quality within a smaller size bracket than Horton’s property, underreported the number of bedrooms, and underestimated Horton’s monthly rental income by over $450. After Horton disputed, Appraisal Nation refused to change its $359,000 valuation.
HUD confirmed receipt of the complaint and has begun processing it. Should HUD determine that there is cause to suspect discrimination, the case could be moved to a HUD administrative or to a federal judge.
*****
Read the March 18, 2023 New York Times article.
Read the February 27, 2023 NCRC article.
Thursday, February 16, 2023
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.
*****
Sources:
Racial Economic Inequality
New Study Finds Significant Racial Bias in IRS Tax Audits
A new study led by a laboratory at Stanford that found that there is significant racial bias in audits. It founds that Black taxpayers receive IRS audit notices at least 2.9 times (and perhaps as much as 4.7 times) more often than non-Black taxpayers. It was done by staff of the Stanford Law School, Stanford RegLab, Stanford Institute for Human-Centered Artificial Intelligence, Stanford Institute for Economic Policy Research, University of Chicago, and the U.S. Department of the Treasury’s Office of Tax Analysis.
They found that the main source of the disparity is differing audit rates by race among taxpayers claiming the Earned Income Tax Credit (EITC). Also, it is shown that maximizing the detection of underreported taxes would not lead to Black taxpayers being audited at higher rates. In contrast, certain policies tend to increase the audit rate of Black taxpayers: (1) designing audit selection algorithms to minimize the "no-change rate"; (2) targeting erroneously claimed refundable credits rather than total under-reporting; and (3) limiting the share of more complex EITC returns that can be selected for audit.
Because the IRS does not collect data by race, the authors had to develop a sophisticated model to identify and analyze racial differences. This absence of IRS data is why such an analysis of audits has not been possible before this. Tax policy expert Dorothy A. Brown opposes having a racial identifier on IRS form 1040, because she "believes unconscious and conscious biases on the part of our tax administrators could unfairly target black taxpayers for audits, could subject black Americans to even worse treatment than they're already receiving. So I completely oppose any racial identifier on the face of the tax return, but there's more many ways to collect the information. So, not having it on the 10 40 doesn't mean you can't get it. The IRS statistics of income, um, division, which publishes statistics, they do surveys. They could ask information on their surveys. They could cross check the tax return data with social security race."
*****
Sources:
Read the February 14, 2023 Forbes article.
https://siepr.stanford.edu/publications/measuring-and-mitigating-racial-disparities-tax-audits.
https://taxjustice.net/wp-content/uploads/2021/04/TaxcastExtraScript0421.pdf.
Lessening Racial Inequality
President Joe Biden Orders Federal Government to do More to Address Racial Inequality
The President's new Executive Order requires that an initial review into long-standing disparities in government services and treatment that he issued as Executive Order #13985 on his first day in office become an annual requirement for federal agencies. The reviews are aimed at increasing access to federal programs, services, and activities for disadvantaged communities. The new order also directs federal agencies to have equity teams and name senior leaders who would be accountable for increasing equity and addressing bias.
As the Order states:
"When any segment of society is denied the full promise of America, our entire Nation is held back. But when we lift each other up, we are all lifted up. As the President has said: 'Advancing equity is not a one-year project. It’s a generational commitment.'"
The Executive Order:
- Launches a new annual process to strengthen racial equity and support for underserved communities.
- Empowers Federal equity leaders.
- Strengthens community partnerships and engagement.
- Invests in underserved communities.
- Improves economic opportunity in rural and urban communities.
- Addresses emerging civil rights risks.
- Promotes data equity and transparency.
Federal agencies would need to improve the quality and frequency of their engagement with communities that have faced systemic discrimination. Also, the order formalizes Biden’s goal of a 50% bump in federal procurement dollars that go to small and disadvantaged businesses by 2025.
Under the order, agencies must also focus on new civil rights threats, such as discrimination in automated technology and access for people with disabilities and for those who speak languages other than English. It also includes a push to improve the collection, transparency and analysis of data to help improve equity.
To read more about additional steps agencies have taken and the Administration’s efforts to advance equity and justice for underserved communities, go to www.whitehouse.gov/equity. See agency 2022 Equity Action Plans and relevant links at www.performance.gov/equity.
*****
Sources:
Subscribe to:
Posts (Atom)