This is Black History Month, but rather than a post on black history, I think it may be useful to share some depressing information about the current status of African-Americans vis a vis the White Americans who have occupied a privileged social position in this country even after most of the legal disabilities targeting people of color were repealed.
The Institute for Policy Studies recently issued a report on the wealth gap between whites, Latinos and blacks in the United States.The report looked at trends in household wealth among Black, Latino and White households over the past three decades.
Since the early 1980s, median wealth among Black and Latino families has been stuck at less than ten thousand dollars, while the median wealth of White households, adjusted for inflation, grew from $105,300 to $140,500. The median White family has 41 times more wealth than the median Black family and 22 times more wealth than the median Latino family.
The wealth gap has gotten wider as wealth in America has become extremely concentrated.The median American family of any color has seen its wealth drop 3 percent between 1983 and 2016–a period of time in which the richest 0.1 percent have seen their wealth jump 133 percent. The three wealthiest families–the Waltons, the Kochs and the Mars–have seen their wealth increase by nearly 6,000 percent.
Wealth held by members of the Forbes 400 equals that of all Blacks plus a quarter of Latinos.
The report takes issue with analyses that treat the racial wealth divide and the growth of economic inequality as two separate issues; instead, it finds that they are mutually reinforcing outcomes of larger economic issues–issues that result from public policies that have favored–and continue to favor–both White Americans and the very wealthy.
Just one example: As this is being written, Mitch McConnell and the Senate GOP are proposing to eliminate what they like to call the “death tax,” and the rest of us call the estate tax.
The estate tax raises $20 billion dollars a year, which is a lot of money, but a pretty insignificant part of the federal budget. It applies only to estates worth more than $5.5 million dollars, and people with lots of money can pretty easily structure their wills to avoid it.
The tax code is more than a ledger. It is a national statement of values. And so this little law inspires a great commotion during each tax debate. To its opponents, it is the ultimate (literally) punishment on success and an affront to the family legacy that each striving individual hopes to leave. To its supporters, it is a necessary bulwark against inherited plutocracy, which offends the national virtue of merit over privilege.
The article goes through the arguments advanced in favor of repeal and in favor of retention of the estate tax, and is worth reading for a quick review of the debate. But the argument for retention most relevant to policy’s role in worsening inequality is that, in a period defined by the rising gap between rich and poor, we need to recognize the enormous role played by inheritance.
According to analysis byMatt Bruenig, a writer and the founder of the advocacy group People’s Policy Project, four out of 10 members of the wealthiest 1 percent inherited some money, with an average inheritance in the millions of dollars….
In the last half century, the average wealth of the bottom half has gone from about nothing to about $1,000 in debt. Meanwhile, the returns at the top have accelerated. In the 1960s, families in the top 1 percent were six times wealthier than families in the middle, according to the Urban Institute. By 2016, the 1 percent was 12 times wealthier than the typical family. As wealth inequality has soared, the estate tax has been diminished, with the number of estate tax returns declining by 76 percent between 2006 and 2015. There is little doubt that 21st-century tax policy has assisted the concentration of wealth.
When ostensibly color-blind tax policy benefits “haves,” that policy inevitably benefits Whites.
And let’s face facts: money is power.