While some people refer to the taxation of blackness from the perspective of the emotional and psychological costs of racism, the financial metaphor of “Black Tax” is also quite literal, referring to the ways discriminatory policies and practices burden Black families in unique ways—and specifically how Black professionals, when they attain financial security, are often expected to support their extended families and networks.
Our relationship to money is often related to time and need—working-class people don’t have the luxury or class privilege to save for the future if they have a “right now” need. So while white professionals can often rely on their extended families for monetary loans, gifts, and inheritance, Black professionals are often living paycheck to paycheck because even when they are single or childfree, they are often contributing income to households that are not their own to address an immediate need.
Because of this “Black Tax,” money in the Black family flows up, not down, which results in increased debt, decreased savings, and a lessened opportunity to build generational wealth.
Black women are uniquely impacted due to their likelihood to access higher education and higher income jobs. Tech company founder and CEO Sheena Allen notes that because many Black people in her peer group share their income, they can’t pass it down through savings, investments and wealth-building, they have to pull it up to help their families make ends meet. For Black women, who are often caregivers, the Black tax becomes a form of caretaking that depletes their long-term savings and prospects.
Sociologist Jasmine Hill argues that the Black Tax emerges from institutional neglect. She states that the economic collectivism required in black families and communities is a result of their historical exclusion from the subsidies, opportunities, and protections afforded to white families. This intentional elimination makes governmental failures the personal obligations of individuals, which means “the Black tax allows the state to shift the costs of social support to Black women.”
Black Womenomics, a research report compiled by Goldman Sachs, acknowledges that the racial wealth gap is directly related to the economic disadvantages experienced by Black women, which inevitably impacts Black families.
Economic inequality is measured by the amount of wealth that can be earned and transferred generationally, which has historically and almost exclusively advantaged already well-off white families. The reversal of wealth represented by the Black Tax has to be corrected to make economic justice and equity possible. In order to address the racial wealth gap, we have to address the direction money is coming in and going out within marginalized communities.
I’m Robin Boylorn…until next time…keep it crunk!
Written by Robin Boylorn
Edited by Brittany Young
References
https://www.goldmansachs.com/insights/pages/black-womenomics-report-summary.html
https://www.goldmansachs.com/insights/pages/black-womenomics-f/black-womenomics-report.pdf
https://genderpolicyreport.umn.edu/black-women-and-the-black-tax/
https://news.harvard.edu/gazette/story/2021/06/racial-wealth-gap-may-be-a-key-to-other-inequities/
https://www.americanprogress.org/article/eliminating-black-white-wealth-gap-generational-challenge/
https://www.npr.org/2022/08/13/1113814920/racial-wealth-gap-economic-inequality
https://www.cnn.com/2021/03/10/investing/black-women-wealth-gap-goldman-sachs/index.html
https://www.cnn.com/2021/06/01/politics/black-white-racial-wealth-gap/index.html
https://www.vox.com/the-highlight/22323477/personal-finance-black-tax-racial-wealth-gap
