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Pepperdine University School of Law

Thursday, May 16, 2019

NY Times: Can The Racial Wealth Gap Be Closed Without Speaking Of Race?

New York Times op-ed:  Can the Racial Wealth Gap Be Closed Without Speaking of Race?, by Emily Badger:

Elizabeth Warren wants to offer down-payment assistance to home buyers in formerly “redlined” neighborhoods where the federal government once denied access to mortgages. Cory Booker would like to create “baby bonds” that would be worth more to children in poorer families, helping them one day to buy houses or other assets.

Both presidential candidates say their proposals would aid in narrowing the enduring black-white wealth gap in America. But neither policy attempts to do that in the most direct way possible — by steering benefits to African-Americans.

Their ideas, along with several others that scholars advocate, are facing a tricky problem today. There’s growing momentum on the left to address the racial wealth gap. But the prospects for race-based policies before the Supreme Court are unpromising, and that’s unlikely to change with five conservative justices. ...

Proponents concerned about the wealth gap instead must come up with policies that have the effect of disproportionately building wealth for African-Americans, without singling them out. ... 

Policies like the mortgage interest deduction, for example, disproportionately benefit white families, who are more likely to own homes. So do tax advantages for the rich, who are more likely to be white. Even federal investments in seemingly race-neutral infrastructure like the Interstate Highway System had this effect by enabling the development of all-white suburbs in an era of legal discrimination.

Wealth-building proposals today are trying to engineer a similar if opposite outcome. That makes the details thorny. ...

“The first and most efficient approach is targeting relief to the people who were targeted with discrimination,” said Dorothy Brown, a law professor at Emory University. “If we can’t get there, then we have to go to next best.”

Ms. Warren’s strategy, she said, is a clever workaround. Rather than specifying African-Americans, Ms. Warren’s bill would target specific neighborhoods where African-Americans harmed by the legacy of lending discrimination are likely to live.

Other researchers argue that a program based on neighborhoods redlined in the 1930s would be too narrow; most African-Americans who buy homes aren’t purchasing in such neighborhoods today (and in some cities, middle-income whites are).

But the kind of neighborhood criteria Ms. Warren has in mind could be one model. Ms. Brown proposes identifying neighborhoods with the least household wealth and allowing tax breaks associated with homeownership, like the mortgage deduction, only to people who live there. ...

Today, African-Americans make up about 13 percent of the population, but hold only 2.6 percent of the country’s wealth, said William Darity, a professor at Duke who has also worked on the baby bonds proposal. He wants to see those numbers equalized.

“That’s an objective that is not achieved by any of the existing policies on the table now,” Mr. Darity said. “Ultimately, you need a person-based program if you’re really concerned about the racial wealth gap. And it not only has to be person-based, but it has to be race-specific.”

That would look, he said, like another idea that has gotten attention — albeit with far fewer details — on the campaign trail: a comprehensive reparations program.

https://taxprof.typepad.com/taxprof_blog/2019/05/ny-times-can-the-racial-wealth-gap-be-closed-without-speaking-of-race.html

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Comments

While conceding that there are structural issues facing the black community in the US, such as the abysmal quality of public schools (*cough* teachers' unions), someone needs to address the elephant in the room - culture.

When over 70% of your children are born to single parents, who are often themselves still children, how can you expect positive outcomes to mirror other demographic groups without such dismal statistics? Uneven inputs will always produce uneven outputs.

Until the culture changes, all the governmental money and programs in the world won't have a substantial impact (and many have argued that government money is precisely what contributed heavily to this breakdown in culture, see Thomas Sowell among others).

Posted by: Todd | May 16, 2019 7:25:23 AM