Death, Racism & Taxes

A Tax Code Optimized for White Wealth Leaves Black Americans Behind: Dorothy Brown has spent her career as a law professor documenting racism in a tax system that’s supposedly colorblind. by Ben Steverson via Bloomberg

LET’S DIVE IN, SHALL WE?!

It took several years for her to publish her first research on the question, focusing on the taxation of married couples. Black Americans are more likely to be single, and if they’re married, it’s more likely both spouses will be working. These considerations wouldn’t have mattered when the income tax made its debut in 1913, because all earners were treated the same regardless of marital status. But in 1930 a rich White shipbuilder named Henry Seaborn persuaded the U.S. Supreme Court to lower his tax bill by imputing half his income to his wife. Congress eventually went along, and ever since, couples with only one high earner have paid less. Brown realized this policy had meant higher tax bills for her parents: The tax code essentially treats a plumber and a nurse who are paying for child care and commuting expenses with after-tax dollars the same or worse than it does a banker earning their combined salaries whose spouse stays home with the kids.

In the next 20 years, Brown went on to systematically catalog other ways in which, when Black families like her own tried to hoist themselves up the economic scale, the U.S. tax system pulled them down. Her colleagues, who were overwhelmingly White, expressed skepticism, however. “Dorothy, everybody knows your work is irrelevant, because Black people are poor and don’t pay taxes,” she says one professor told her, rudely laying bare an assumption she’s confronted countless times. (Four-fifths of Black households don’t fall below the poverty line.)

WOW. Wowwwwww.

A stroke of luck helped her avoid the student debt that burdens many other Black professionals. Her father, who was eventually hired as a union plumber by the New York City Housing Authority, briefly lost that job during the city’s mid-’70s fiscal crisis. The layoff helped Brown, who graduated high school at 16, qualify for a full scholarship to Fordham University, which she could attend while living at home. A law degree from Georgetown University, and a degree in tax law from NYU followed.

A federal clerkship led to a job at a boutique law firm that handled municipal bonds. Then in 1987 she was hired away by a client, the investment bank Drexel Burnham Lambert. The firm, famously cutthroat and aggressive, made huge profits on the junk bond boom, and it would later collapse in scandal after the conviction of executive Michael Milken. Brown recalls that a managing partner had this piece of advice: “Dorothy, if you want loyalty, buy a dog.”

Fair.